British American Tobacco (BAT) reports group revenue up 37.6%, with profit from operations up 39.1%.
The group puts the stronger performance down to the acquisition of Reynolds American Inc (RAI), improved revenue from the Next Generation Products (NGP) portfolio, pricing and a translational foreign exchange tailwind due to the relative weakness of sterling.
The company completed the acquisition of RAI in July 2017 for £41.8bn to become the world's leading international tobacco and Next Generation Products (NGP) business.
Volume of cigarettes and tobacco heating products (THPs) grew by 3.2%, driven by the acquisition of RAI but fell on an organic basis by 2.6%, though it outperformed the market which declined by an estimated 3.5%.
The Group's cigarette market share grew 40 basis points (bps), driven by the Global Drive Brand (GDB) portfolio, with volume up 7.6% on an organic basis with market share up, excluding the US, by 110 bps.
Operating margin, at current rates, was ahead of 2016 by 30 bps at 31.9%, by 270 bps on an adjusted basis, or 40 bps on an adjusted organic basis.
Diluted earnings per share increased by over 600% largely due to a gain of £23.3bn related to the acquisition of RAI and a deferred tax credit of £9.6bn.
Dividend per share increased 15.2% to 195.2p, payable in four quarterly dividend payments of 48.8p per share. An additional dividend of 43.6p was also paid in February 2018.
Commenting on the latest figures, chairman Richard Burrows said: The transformational deal to acquire RAI marked a record year in 2017.” He added: “This is an exciting time for the Group and the Board has confidence in the Group's ability to continue delivering sustainable growth in the years to come."
Despite the largely upbeat message from BAT, the market response to the latest numbers were not positive – the share price was down 4.88% in early morning trading at 4229.