* H1 adj. EPS up 10 pct to 111.1p at constant currency
* Rev up 4 pct to 7.75 bln stg, cigarette volume down 3.4
* Shares up 0.3 pct
By Neil Maidment
LONDON, July 31 British American Tobacco
said it would move rapidly to expand its presence in
the electronic cigarette market around the world after launching
its first product in Britain earlier this week.
The world's No.2 cigarette maker, whose premium brands
include Kent, Dunhill, Lucky Strike and Pall Mall, launched
online sales of 'Vype' on Monday, becoming the first major
tobacco firm to offer e-cigarettes in Britain.
"We'll focus on the UK, but the e-cigarette business is
moving quickly all over the world, and we want to make sure that
we also move quickly, because we want to take a leading
position," BAT director Kingsley Wheaton said on Wednesday,
after the firm posted a 4 percent rise in first-half sales.
"I think we'll be following it (Vype) up with other
opportunities around the world with a reasonable degree of
speed," he said.
Electronic cigarettes - battery-powered metal tubes that
turn nicotine-laced liquid into vapour - are gaining popularity
among smokers who are trying to quit. Market consultant
Euromonitor estimates the world market was worth over $2 billion
All the top tobacco companies including Lorillard,
Imperial Tobacco, Reynolds American and Altria
are now placing bets on e-smokes, which some analysts say
may outsell conventional cigarettes in 10 years.
In Britain, where BAT expects to sell Vype in shops from
September, the number of e-cigarette users is expected to grow
from 700,000 in 2012 to 1.3 million this year, according to
analysts. E-cigarettes will be regulated in the UK as
non-prescription medicines from 2016.
"BATS' move we would argue is positive and puts pressure on
the UK major tobacco manufacturers to demonstrate their
respective capabilities in the space," Panmure analysts said,
adding the group's first-half results were broadly in line.
BAT said it was confident of another year of good earnings
growth as price rises helped offset falling consumption to push
first-half sales up 4 percent to 7.75 billion pounds ($11.8
billion) at constant exchange rates.
Operating profit grew 4 percent to 2.94 billion pounds.
Sales volumes in the first six months of the year were down
3.4 percent at 332 billion cigarettes as a strong performance in
Asia Pacific and higher sales of its premium brands was
outweighed by a fragile European market and tough one-off trade
comparatives in Brazil and the Middle East.
"Despite fragile economic conditions persisting in some
parts of the world, notably Europe, BAT has delivered another
good set of results," Chairman Richard Burrows said.
Half-year adjusted diluted earnings per share rose 10
percent to 111.1 pence, and BAT declared an interim dividend of
45.0 pence, up 7 percent on last year.
Shares in the firm, which hit a record high of 3807.50 pence
in May, were up 0.4 percent to 3474.0 pence at 0918 GMT.