British American Tobacco Plc – HALF-YEAR REPORT TO 30 JUNE 2017

Adjusted profit from operations, at current rates of exchange, grew 15.8%. At constant rates of exchange, adjusted profit from operations was up 3.2% at £2,531 million. Excluding the adverse transactional impact of foreign exchange, the increase would have been approximately 6%.

Adjusted operating margin was ahead of prior year by 30 basis points (bps) at 37.1%.

Basic earnings per share were 15.3% lower at 121.8p (2016: 143.8p) due to the impact in 2016 of the sale by Reynolds American Inc. (“Reynolds”) of the international brand rights to Natural American Spirit.

Adjusted diluted earnings per share, at current rates of exchange, were 21.0% higher at 134.4p and, at constant rates, were up 6.2%.

Continued excellent performance in Next Generation Products (“NGPs”), with our Tobacco Heating Product (“THP”), glo, reaching an estimated 8% market share in Sendai, Japan. Early progress in other launch markets is above expectations. In vapour, the Group continued to cement its leadership position in Europe.

The acquisition of Reynolds was completed on 25 July 2017, for a total consideration estimated, at the date of closure, at £41.7 billion for the remaining 57.8% of Reynolds not already owned by the Group.  

The Board has declared an interim dividend of 56.5p, being one third of the total 2016 dividend, a 10% increase on last year. This will be paid on 28 September 2017. As announced on 26 April 2017, the Group will move to quarterly dividends from 1 January 2018.