BRITISH American Tobacco (BAT) – which employs around 1,200 people in Southampton – has seen profits rise despite the pandemic.

The cigarette maker said it was “uniquely placed” to promote alternatives to smoking, such as its vaping products and nicotine pouches.

BAT said Covid-19 wiped 2.5 per cent off global sales growth, but pre-tax profits rose by 10 per cent to £8.7bn for 2020. On an underlying basis, pre-tax profits were up one per cent to £10.2bn.

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The group has been expanding what it calls the “new categories” segment of the market, including brands such as vaping products Vuse and Vype, as well as tobacco-free nicotine pouches Velo.

Underlying sales of these new categories jumped 15.4 per cent excluding foreign exchange movements, to £1.4billion last year.

Cigarette sales by volume fell 4.6 per cent, though revenues for so-called combustibles rose 2.8 per cent on a constant currency basis to £23.6bn in 2020.

Jack Bowles, chief executive of BAT, said the group was “uniquely positioned to encourage the switch to reduced risk products”.

He added: “We aim to further accelerate the growth of revenue from our new categories, reaching £5bn by 2025.

“We are proud that we now have 13.5m consumers of non-combustible products, a growth of three million – doubling the rate of consumer adoption in the second half of 2020.

“We are well on track to meet our ambition of 50 million consumers of our non-combustible brands worldwide by 2030.”

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The group said it expected to see an ongoing impact from the pandemic in 2021, which would weigh on revenues and earnings growth.

But BAT has recently said the revenue hit from Covid-19 would be slightly smaller than the three per cent it had earlier feared,

It forecast revenue growth of between three and five per cent this year and said it was ahead of schedule to deliver £1bn of annual cost savings by 2022, which would fund investment in new categories, such as vaping.

BAT hopes to grow revenue to £5bn in new categories by the middle of the decade.