British American Tobacco said earnings have been boosted by exchange rate changes in the first half of the year, and the company expects to outperform the industry when it reports results for the six months to 27 June.
First half earnings per share is expected to benefit from a significant translational foreign exchange tailwind of around 14 per cent. The pound tumbled in the wake of the Brexit vote last year and has remained at a lower rate since.
The cigarette maker said if exchange rates stayed the same for the remainder of the year, there would be an adverse transactional impact on operating profit of two per cent for both the first half and the full year. For translation, the group said, this would be a tailwind on operating profit of approximately 13 per cent for the half year and seven per cent for the full year.
The company, which owns the Dunhill, Lucky Strike and Benson & Hedges brands, also said first half revenue is "expected to benefit from good pricing". BAT said first half volumes will be compared to a strong previous year and will be hit by the phasing of shipments in a number of key markets.
However, full year volume is still expected to outperform the market, which BAT anticipates will be down four per cent.
Overall, BAT said: "The business continues to perform very well, in line with expectations."