“We don’t see any change in patterns of consumption of cigarettes because of COVID-19,“ said Chief Executive Officer Jack Bowles, via webcast at the company’s capital markets day event. “It is a daily purchase, so consumers continue to go to shop, even in Italy and France where tobacco shops are still open.”
Finance Director Tadeu Marroco said that the company did face some manufacturing disruptions in China, where the virus originated, however production has resumed this month. Marroco added that the main sales decline witnessed was that in duty-free shops, a negligible part of its business.
No need to update prior forcasts
Prior to the outbreak, the BAT had forecast a 4% decline in 2020 industry sales of cigarette and tobacco heating products, and around a 5% drop in the United States. Given the minimal impact that the current pandemic has had on the company, these forcasts do not need to be revised.
An article on Reuters has pointed out that BAT has also maintained its forecast for constant currency adjusted revenue growth in the range of 3% to 5%, and earnings per share growth (EPS) in high single digits for the year. The company’s shares closed down nearly a percent, in contrast to a 4% drop in the broader FTSE. FTSE that has been roiled by the relentless spread of coronavirus globally.