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Russia and vaping in the spotlight as the manufacturer of Pall Mall BAT to upgrade shareholders

Russia and vaping in the spotlight as the manufacturer of Pall Mall BAT to upgrade shareholders

Shareholders will check for updates on the UK American Tobacco Russian exit as he reports on his progress this year.

The company is due to renew its shareholders on Tuesday, months after the Kremlin launched an unprovoked further invasion of Ukraine.

After lingering for a while after the conflict began, BAT in March announced its withdrawal from Russia.

The company produces Pall Mall cigarettes and occupied in Russia about 25% of the market.

As people care more and more about their health, it is very important that the group consolidates its place in the market of alternative tobacco products.

Analyst Laura Hoy

He is looking for someone to sell his Russian business, so any update will be interesting for shareholders.

They will also look for any consequences that the company sees from the cost of living crisis.

He was in a sense lucky because of his defensive nature. It’s one of many companies in London that works well even when the economy is on track.

Just like drugs and foods sold by companies like AstraZeneca and Unilever that are listed in London, people continue to buy cigarettes even during the downturn.

But while sales may not face a big hit, the company will still be wary of what it pays to make its products. Expenditures on raw materials and labor have risen in recent months.

This could shift these additional costs onto consumers.

Ironically, the company also helps, if it wants, the tax burden on cigarettes.

Much of the cost of the package is tax, so even if BAT passes on all additional costs to buyers, it will result in a much smaller percentage increase for products with a lower tax on them.

«Tobacco it’s a shrinking industry, so the most important thing for British American Tobacco is that the group is squeezing every pound out of its shrinking customer base, ”said Hargreaves Lansdown stock analyst Laura Hoy.

“For BAT investors, this is nothing new, but inflation could make it worse. To this end, the margin will be a figure to watch when investors look for evidence of whether rising commodity prices are starting to eat up profits.

“However, cigarette prices are mostly made up of taxes, so rising cigarette costs may not make them more expensive for consumers.”

When they receive an update on trading on Tuesday, many investors will be looking for information on new business categories.

This, BAT hopes, is the future of the company. He built his business on tobacco, but in recent years has been at the core of a variety of products.

These include the Vuse vape line, which by one measure is the largest in the world, the nicotine bags under Velo’s lips and the heated Glo tobacco products.

Last year, revenue from these products was more than £ 2 billion, and according to BAT’s targets, it should more than double in just a couple of years.

“New categories that offer smoke-free options are the future, so they are also worth a look.

“It is estimated that by 2025 the unit’s revenue is £ 5 billion, so we would like to see it on track to achieve this goal.

“This part of the business is still only a small part of the whole, and as people become more concerned about their health, it is important that the group consolidates its place in the alternative tobacco market.”


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