BAT commits to £1.3bn share buy-back programme for 2026 despite market challenges

British American Tobacco's (BAT) management said they remain committed to shareholder value by delivering robust cash returns, with progressive dividends and sustainable share buy-backs, including a £1.3 billion programme for 2026.

This was according to the chief executive Tadeu Marroco. He said at the release of the group results for the year to December 31, 2025, that the momentum of the group in 2025, with resilient combustibles delivery and further productivity initiatives, that they would be able to deliver on their target of 3% to 5% revenue growth, and 5% to 8% of growth in adjusted earnings per share (EPS), with 2026 expected to be at the lower end of the range.

The group is planning to close its sole South African manufacturing facility by the end of 2026, as a result of the devastating impact of the illicit cigarette trade on the local market. However, the group said it remains committed to the South African market and will transition from a local manufacturing model to an import-based supply chain.

Marroco said the 2025 group results were at the top end of guidance. Diluted EPS was up 157% to 349.1 pence. The dividend was 2.5% higher at 245.04p. Some 4.7 million consumers were added to the group's smokeless brands – smokeless products made up 18.2% of group revenue versus 17.5% in 2024.

New Categories' products contribution increased 77.1% to £442m.Marroco said their US business delivered strong growth, mainly driven by combustibles, resulting from commercial actions and enhanced execution.

Velo Plus delivered triple-digit revenue growth, within a year of launch. Velo won market share from Philip Morris' Zyn and Altria's On! in the US with features such as higher nicotine content and cheaper prices.

A recent improvement in Vuse performance was encouraging, although the Vapour category continued to be impacted by illicit proliferation.

"Over time, we believe Vuse is well positioned to benefit from stronger enforcement at the Federal and State level," said Marroco.

In AME (Americas and Europe), the multi-category portfolio continued to perform strongly.

In APMEA (Asia Pacific, Middle East & Africa) the region was impacted by fiscal and regulatory challenges in Bangladesh and Australia.

The New Categories revenue returned to double-digit growth in the second half, driven by strong Velo growth in all regions.There were three premium innovation launches – Vuse Ultra, glo Hilo and Velo Shift, with further targeted rollouts planned in 2026.

BUSINESS REPORT