British American Tobacco (BAT) has said it is on track to make more money from selling vapes in the second half of the financial year than the first.
The smoking giant said in a trading update that it had about 40% vaping market share across key markets like the US and the UK with its Vuse products.
However, it added that global tobacco industry volumes are expected to be down 2% year-on-year as more people turn away from smoking traditional cigarettes.
Chief executive Tadeu Marroco said the company is making “further progress increasing profitability” across “new category” products.
Analysts have projected total sales for the year to be down slightly on 2023, at £26.3 billion, while BAT’s Vype, Glo and Vuse vaping products should see sales rise about 9% to £3.6 billion.
Revenue and adjusted profit for the year was in line with previous guidance for low single-figure organic growth, the company said.
Mr Marroco said the company’s move towards vapes and oral products was making “progress”.
The strategy will see BAT become a “predominantly” smokeless business by 2035, and has seen shares rise 30% in the last year.
However, BAT also said it had seen a 9% fall in US industry volumes since the start of the year.
It said “continued macro-economic pressures and the impact of illicit single-use vapour products” were behind the fall.
The trading update comes amid a ramp-up in anti-smoking regulation and taxes from governments around the world on public health grounds.
Smokers and vapers in the UK will pay more after Chancellor Rachel Reeves announced a new vaping tax and an increase in tobacco duty to “maintain the incentive to give up smoking”.
The flat rate duty on all vaping liquid will come into effect from October 2026.
Meanwhile, the Tobacco and Vapes Bill has been introduced in Parliament, which would prevent anyone born after January 1 2009 from legally smoking by gradually raising the age at which tobacco can be bought.
But the Government has reversed potential plans to make it illegal to smoke in pub beer gardens.
