Shares in British American Tobacco (LON:BATS) have gained ground in today’s session, outperforming the broader UK market, as the blue-chip company revealed that it had benefitted from the pound weakness which boosted its earnings in the first half of its financial year. The blue-chip tobacco manufacturer, however, expects its profit growth to be weighted toward the second half of the year.
As of 10:32 BST, BAT’s share price had added 0.94 percent to 5,465.00p, outperforming the benchmark FTSE 100 index which is currently 0.42 percent better off at 7,532.02 points. The group’s shares have added more than 34 percent to their value over the past year, and are up by some 18 percent in the year-to-date.
British American Tobacco said in a statement today that its first-half earnings per share were expected to benefit from a currency translation tailwind of around 14 percent. The pound has tumbled in the wake of the Brexit vote almost a year ago, boosting companies with international exposure.
The company also noted that if exchange rates stayed the same for the remainder of the year, there would be an adverse transactional impact on operating profit of two percent for both the first half and the full year. For translation, however, this would be a tailwind on operating profit of approximately 13 percent for the half year and seven percent for the full year.
The blue-chip group further said that its business continued to perform well, and that its profit growth was expected to be weighted to the second half of the year.
In analyst news, Whitman Howard reiterated its ‘hold’ rating on BAT today, valuing the shares at 5,300p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 5,543.13p.