British American Tobacco PLC

Latest Results (30.01.2026):

British American Tobacco PLC — Half‑Year (H1) 2025 results (six months to 30 June 2025): the group reports mixed headline metrics with revenue down slightly on a reported basis but up at constant currency, stronger New Category momentum (notably in the U.S. with Velo Plus), improved reported operating profit driven partly by a favourable update to the Canadian settlement provision, and management reiterating it is on track for full‑year guidance while expanding the 2025 buy‑back programme to £1.1bn.

Revenue

Reported Group revenue was £12,069m (‑2.2% vs H1 2024) but rose +1.8% at constant FX; a c.4.0% translational FX headwind weighed on the reported figure.

New Categories and smokeless

New Categories revenue was £1,651m (flat on a reported basis, +2.4% at constant FX). Smokeless products now account for 18.2% of Group revenue (+70bps vs FY24); New Categories contribution increased to £179m (+38.6% at constant FX) and contribution margin improved to 10.6% (+2.8 ppts).

Profit from operations and adjusting items

Reported profit from operations rose to £5,069m (+19.1%), with reported operating margin at 42.0% (up 7.5 ppts) — partly due to lower one‑off adjusting charges and a £575m net credit from an update to the Canadian settlement provision. On an adjusted basis (as adjusted for Canada) profit from operations was up +1.9% at constant FX, with adjusted operating margin (as adjusted for Canada) broadly flat at c.43.2%.

Earnings per share

Reported diluted EPS was 203.6p (+1.6%). Adjusted diluted EPS (at constant rates) was 169.1p (‑0.1% YoY); when adjusted for the Canada settlement mechanics, adjusted diluted EPS (as adjusted for Canada) was 162.1p (+1.7% at constant FX).

United States performance

The U.S. returned to revenue and profit growth: U.S. revenue +3.7% at constant FX. Modern Oral (Velo Plus) surged — U.S. Modern Oral revenue rose ~384% to £105m and Velo category share climbed materially; combustibles benefitted from strong price/mix (+11.4%) although volumes were down.

Regional split

AME revenue +3.5% at constant FX with strong combustibles and Modern Oral performance; APMEA revenue down 4.8% at constant FX, hit by regulatory and fiscal headwinds in Australia and Bangladesh. Adjusted regional profit trends broadly mirror these movements.

Cash, debt and returns to shareholders

Net cash generated from operations was £2,309m (‑27.0% H1), free cash flow before dividends £1,234m (‑42.1%). Adjusted net debt was £29,749m (improved vs prior year). Management increased the 2025 share buy‑back to £1.1bn following partial monetisation of the ITC stake (realised c.£1.1bn) and reiterated commitment to dividend growth.

Guidance and outlook

Management says H1 is slightly ahead of expectations and the Group is on track for full‑year 2025 guidance: revenue growth at the top end of a 1.0–2.0% range, mid‑single digit New Category growth, adjusted PFO growth of 1.5–2.5% (adj. for Canada) and operating cash conversion above 90%. Expected FY 2025 capex ~£650m and net finance costs ~£1.8bn (subject to rates).

Canada settlement and accounting impact

The Approved Plans for Canadian litigation remain the key contingent/legal item: a provision of £6.2bn was recognised in 2024; H1 2025 included a £575m net credit reflecting revised discounting assumptions (treated as an adjusting item). An upfront payment of ~£2.6bn is expected in H2 2025; the group presents adjusted metrics “as adjusted for Canada” to reflect the settlement cash flows.

Product innovation and H2 catalysts

Management expects an acceleration in New Categories in H2 driven by phased roll‑outs (e.g., Vuse Ultra, glo Hilo), continued expansion of Velo, and cost‑efficiency programmes (targeting c.£500m annualised savings by end‑2028, with one‑off costs ~£500m, c.£350m treated as adjusting items).