British American Tobacco — Building momentum

British American Tobacco’s (BAT’s) H125 results were slightly ahead of expectations and show delivery on the promise to move to higher rates of sustainable growth following two years of below-norm performance. Importantly, the US returned to revenue and profit growth, driven by the strengthened combustibles portfolio and better execution, together with excellent growth in Modern Oral following the Velo Plus launch late last year. Modern Oral was the standout performer in H1 and Velo is the fastest-growing brand in the fastest-growing New Categories segment globally. BAT calls FY25 a deployment year as it is launching new products in all New Categories, with Vuse Ultra in Vapour, glo Hilo in Heated Products and Velo Plus in Modern Oral. Management expects the ongoing phased roll-out of these innovations to drive growth in H2 and beyond.