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British American Tobacco (BATS) has grown first half revenues by 4.6% to £12.2bn as growth in pricing and new categories mitigated a continued decline in sales volumes.

Total cigarette and tobacco heating product (THP) volume declined in line with the industry in the six months to 30 June, down 3.5% to 336 billion sticks.

However, total revenues were up 4.6% to £12.2bn as a 7% increase in price/mix across the cigarette portfolio, as well as growth in revenue from new categories and traditional oral, more than offset lower cigarette volume.

BAT also experienced a foreign exchange tailwind of 1.2%. On a constant currency basis and excluding the impact of excise on bought in goods, adjusted revenue increased by 4.1%.

In the key markets, BAT’s value share increased 10 bps while volume share remained in line with 2018.

Strategic cigarette and THP increased volume share by 60 bps driven by the continued growth of Rothmans and success of Neo, with Strategic Cigarette and THP volume down only 0.5%.

Revenue from the strategic portfolio was up 8.7%, or 6.6% on an adjusted constant rate basis, with the growth driven (at constant rates) by 5.2% growth from strategic brands, a 27% increase in revenue from new categories to £531m, THP revenue up 4% to £301, and vapour revenue up 58% to £183m.

Profit from operations was down 1.3%, as the strong operational performance, which included a translational foreign exchange tailwind of 2.2%, was more than offset by the £436 million charge recognised in Canada related to a class action lawsuit in Quebec. Consequently, operating margin declined 210 bps;

Adjusted profit from operations grew 5.9% at constant rates of exchange as the adjusted revenue growth and continued drive for efficiency gains more than offset the increased investment in New Categories that reflects the Group’s continued development of these categorie.”

CEO Jack Bowles said: “We continue to deliver on our financial objectives with adjusted revenue and adjusted profit from operations in line with our guidance, driven by a continued strong financial performance in combustibles.

“Our new categories portfolio continued to deliver encouraging growth. While there is much more to be done, with new product launches planned for the second half of the year and the impact of a full year of additional investment, we expect revenue growth to accelerate in the second half of the year.

“In 2019, we are on track to be around the middle of our guidance range of 30-50% new categories revenue growth per annum, excluding the impact of translational foreign exchange.”

Meanwhile, former Cott Beverages CEO Jeremy Fowden will join the board of BAT as an independent non‐executive director and member of the audit and nominations committees with effect from 1 September 2019.

Fowden is currently the executive chairman of US beverage group Cott Corporation, a position he has held since January 2019, having been CEO from 2009 until December 2018.

Morning update

Blackburn-based forecourt retail operator EG Group has agreed to buy US forecourt retail operator Cumberland Farms for an undisclosed sum.

Cumberland Farms operates about 600 convenience stores and fuel stations across seven North East states and Florida.

A report by Oil Price Information Service in April said Cumberland Farms, based in Westborough, Massachusetts, could fetch “billions of dollars”.

EG Group said it had committed financing in place to support the purchase of what it believed was a “transformative” deal from a Barclays-led bank group.

The acquisition will take the EG Group’s network to nearly 1,700 stores in 30 states, selling more than 2.5bn gallons (9.5bn litres) of fuel with merchandise sales of more than $3bn (£2.5bn) on an annualised basis.

EG Group said it would retain the Cumberland Farms brand on all the acquired stores.

On the markets this morning, the FTSE 100 is down 0.2% at 7,573.4pts.

British American Tobacco is up 2.2% this morning to 3,017p after its interim results. Other risers include Bakkavor, up 2.7% to 108.4p, McColl’s (MCLS), up 1.8% to 70p, Greene King (GNK), up 1.5% to 634.6p and Marks & Spencer (MKS), up 1.3% to 210.5p.

Fallers so far today include Majestic Wine (WINE), down 3.5% to 247p, Devro down 1.5% to 202p and Glanbia (GLB), down 1.4% to €11.64.

Yesterday in the City

The FTSE 100 fell back 0.8% to 7,586.8pts yesterday as Monday’s gains continue to dissipate.

A number of grocery/fmcg FTSE 100 companies were on the slide yesterday, including Unilever (ULVR), down 1.7% to 4,955.5p, Greencore (GNC), down 1.4% to 213.8p, Reckitt Benckiser (RB), down 1.3% to 6,372p, Coca-Cola HBC (CCH), down 1.1% to 2,836p and Morrisons (MRW), down 1.1% to 194.7p.

Irish food group Glanbia (GLB) plunged 15.1% back to €11.80 yesterday after it posted a near 10% slump in first half EBITA before exceptionals.

Pig skin manufacturer Devro also fell 2.4% to 205p after its own interims, despite posted a 25% rise in pre-tax profits on moderately lower sales.

Other fallers yesterday included Premier Foods (PFD), down 6.4% to 33.8p, FeverTree (FEVR), down 5% to 2,336p, Bakkavor (BAKK), down 4.9% to 105.6p, McBride (MCB), down 4% to 65.3p and Hotel Chocolat (HOTC), down 2.9% to 372p.

The day’s few risers included Majestic Wine (WINE), up 1.6% to 256p and PZ Cussons (PZC), up 1.2% to 219.5p.

Just Eat (JE) rose a further 1.5% to 761.4p despite seeing a significant fall in first half profits due to investment to grow sales. Just Eat shares leapt from around 630p on Monday on confirmation of its agreement to merge with Netherlands-based contemporary