Why Is British American Tobacco Plc Up Today?

British American Tobacco Plc (LSE:BATS) shares rose 0.88% to 4,586.0p today, a gain of 40.0p. The consumer products group has been in focus following half-year results that highlighted growth in its smokeless portfolio.

For the first half of 2026, Revenue was £12,235 million, up 2.9% at constant currency, adjusted profit from operations rose 3.5% to £5,421 million and adjusted Diluted Earnings per Share increased 7.9% to 167.8p.

About British American Tobacco Plc

British American Tobacco Plc is a multi-category consumer goods company selling cigarettes and a growing range of smokeless products, including vapour, heated products and modern oral nicotine pouches. Its brands include Vuse, Velo, Glo and Dunhill.

The company operates in many countries and is pursuing a strategy to build a smokeless Business alongside its established cigarette operations. LSE:BATS has a 3.59% weighting in the FTSE 100.

Half-Year Financial Performance

Adjusted profit from operations of £5,421 million and adjusted diluted earnings per share of 167.8p both rose at constant currency. In the US, revenue increased 8.5% and adjusted operating profit rose 10.1%, helped by pricing and growth in newer categories.

The group's focus on cost efficiency and productivity continues to support margins as it invests behind its brands.

New Categories Momentum

New categories revenue was £1,928 million, up 18.0% at constant currency, and smokeless products now represent 19.8% of group revenue, an increase of 1.6 percentage points compared with the 2025 full year. New categories contribution was £257 million, up 54.7%, and the Margin rose to 13.3%.

Velo Plus revenue in US modern oral rose 220%, and the brand's US modern oral Volume share increased 11.6 percentage points to 29.8%. A national roll-out of Velo Max in the US is planned.

Vapour

Vapour revenue rose 5.3% at constant currency. In the US, vapour revenue increased 19.8%, and Vuse's value share rose 4.1 percentage points to 55.9%, reflecting the strength of the Brand with adult consumers.

Shareholder Returns and Balance Sheet

The company is committed to Dividend growth in sterling and is running a £1.3 billion buyback in 2026, with £649 million completed in the first half. Adjusted net Debt was £31,969 million at 30 June 2026, and management expects Leverage to fall within its 2.0–2.5 times target range by the end of the year.

2026 Guidance

Revenue growth is expected at the lower end of the 3–5% medium-term range at constant currency, and adjusted operating profit growth at the lower end of the 4–6% range, weighted to the second half. Adjusted diluted earnings per share growth is expected towards the middle of the 5–8% range, and new categories revenue is expected to grow at a mid-teens percentage.

Why the Multi-Category Strategy Matters

Adult consumers increasingly look for alternatives to traditional products, and a portfolio spanning several categories allows the company to respond to changing preferences while maintaining reliable cash generation from established products.

Geographic Reach and Brands

BAT sells products in more than 150 markets, and its portfolio of global drive brands gives it a platform in cigarettes, vapour, heated products and oral nicotine. The United States is the group's largest market by profit, and its 8.5% revenue growth in the half shows the value of scale, brand ownership and distribution there.

Investment in Innovation

The company continues to invest in product development, regulatory science and consumer insight for its smokeless categories. New products and national roll-outs, such as Velo Max in the US, are designed to broaden its reach with adult consumers. Management stresses responsible Marketing and compliance with local regulations as the business evolves. The group also reports on its progress in reducing the environmental impact of its operations, packaging and Supply chain.

Factors to Monitor

Investors following LSE:BATS may watch the pace of new category growth, regulatory developments in key markets, currency movements, progress on leverage and delivery of the buyback.

Conclusion

British American Tobacco Plc rose 0.88% to 4,586.0p today following half-year results showing 18.0% growth in new categories, higher adjusted earnings per share and a £1.3 billion buyback. Velo Plus and Vuse are central to the smokeless strategy. Future company announcements should provide further detail on operating progress, Capital allocation and management priorities.