British American Defies Illicit Tobacco and Weak Revenue, BTI Share Price JSE Breaks R1,000 Barrier
British American Tobacco’s 2025 rally has defied weaker interim results, with the stock breaking through the R1,000 mark amid shifting...
Quick overview
- British American Tobacco's stock has surged above R1,000, showcasing a strong recovery despite weaker interim financial results.
- The company's half-year results revealed an 8.2% drop in reported revenue, largely due to strategic transformations and divestitures.
- Operating margins have been pressured, declining by 9.7 percentage points, while the company has cut nearly 30% of its workforce since 2020.
- Technical indicators suggest a sustained bullish trend for the stock, indicating potential for further gains beyond the R1,000 mark.
British American Tobacco’s 2025 rally has defied weaker interim results, with the stock breaking through the R1,000 mark amid shifting business strategies and market optimism.
Recovery After a Difficult 2023
After a steep decline in 2023, British American Tobacco (JSE: BTI) has staged an impressive comeback this year, with the share price climbing above R1,000 in a sustained long-term uptrend. This rise comes despite interim financial results revealing weaker performance, as the company navigates macroeconomic headwinds and the shift from traditional tobacco products to smokeless alternatives.
BTIJ Chart Monthly – A New Record High Above 2016 Highs
Financial Performance and Market Transition
The group’s 2025 half-year results showed an 8.2% drop in reported revenue and a decline in operating profit, attributed largely to divestitures, currency translation impacts, and ongoing strategic transformation. On a constant currency basis, revenue slipped by 3.7%.
The New Categories division, which includes smokeless products, delivered mixed results—headline revenue fell 0.4%, but organic constant-rate growth was a strong 7.4%. The customer base for smokeless products rose by 1.4 million to 26.4 million, now contributing 17.9% of total revenue.
Margins Under Pressure and Job Cuts
Operating margins were hit hard, down 9.7 percentage points to 34.5%, mainly due to higher amortisation costs tied to U.S. Combustibles trademarks. Adjusted organic operating profit declined by 0.9% at constant exchange rates. Since 2020, BAT has cut almost 30% of its workforce—over 500 jobs—with another 200 at risk in South Africa due to the illicit cigarette trade and lingering effects of the 2020 Covid-19 cigarette sales ban.
The illegal tobacco trade remains a significant challenge, costing the South African government an estimated R28 billion a year—more than SARS’ entire targeted increase in collections.
Technical Strength and Price Action
After briefly pulling back in late June, BTI shares rebounded 1.5% yesterday, showing renewed interest at key support levels. From about R530 a year ago, the stock has surged 95% to last week’s record high of R1,001.47.
By late May, BTI was testing its 20-week simple moving average (SMA) near R750, which has served as a crucial support line during the climb. After breaking past its 2016 high just under R1,000, the stock has maintained strength, with buying pressure returning in early July. Technicals suggest the longer-term bullish channel remains intact, pointing to the potential for further gains beyond the R1,000 mark despite mixed fundamentals.
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