BAT's first-half profit beats estimates, US business returns to growth
BAT and peers such as Philip Morris, opens new tab(PM.N), opens new tab, Imperial Brands (IMB.L), opens new tab, and Altria (MO.N), opens new tab are trying to capture a bigger share of the vapes, tobacco heating products and oral nicotine pouches market to offset declining sales of traditional tobacco products.
The maker of Lucky Strike and Dunhill cigarettes said revenue in the U.S. grew 3.7% at constant currency, with Velo helping sales of its new categories products rise 3.9%.
It reported adjusted diluted earnings of 162 pence per share for the six months to June 30, compared with 159.4 pence a year ago, and a company-compiled consensus of 154.8 pence.
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Times
5 hours ago
- Times
Trump's ‘biggest deal ever' is no such thing, but I have faith in Europe
European funds and shares jumped for joy when the American president, Donald Trump, announced he had agreed 'the biggest deal ever struck by anybody' with the European Commission president, Ursula von der Leyen. Unfortunately, the euphoria proved short-lived, as markets realised that this new deal means most companies in most countries will collectively pay billions more tax to trade in the world's biggest economy. However, slashing tariffs from 30 per cent to 15 per cent on most exports to America represents a substantial improvement on earlier fears. Closer to home, the British prime minister, Keir Starmer, also met Trump at one of his Scottish golf courses to — among other things — tee up American import taxes set at 10 per cent for our cars and zero for aircraft engines, which Starmer hailed as safeguarding our world-class automotive and aerospace industries. Coming down from the clouds of global politics and macroeconomics, this small, long-term DIY investor is glad I ignored many pessimistic predictions elsewhere to keep faith with British and continental funds and shares. This year's stand-out winner so far is a little-known London-listed investment trust, whose share price has soared 60 per cent since March. That's when I paid 53p for Seraphim Space Investment Trust (stock market ticker: SSIT) shares, as reported here at that time. They traded at 85p at close of play on Friday. One stellar attraction of this £239 million space technology fund is its focus on defence companies listed in Europe. These businesses are benefiting from increased demand from continental countries since America warned that everyone must pay more for our own security in future. But Seraphim's chief executive, Mark Boggett, emphasised that extraterrestrial technology can also have more peaceful applications. He told me: 'Satellite-driven weather forecasts are increasingly vital to modern agriculture, providing real-time, precise data that helps farmers make smarter decisions about planting, irrigation, pest control and harvesting. 'By reducing the uncertainty of unpredictable weather, these forecasts improve crop yields, enhance resource efficiency and build resilience. a Seraphim holding, is building its own satellite constellation to derive truly global data, enabling hyperlocal and highly accurate short-term weather forecasts. • A robot surgeon? I'll put my money on that 'These have achieved some impressive savings: 20 per cent less crop loss due to unexpected freezes or hail, and $41 saved per acre in wasted irrigation costs.' Less happily, bad weather in west Africa hit the cocoa harvest, pushing up the price of this commodity and hurting profit margins at the Swiss chocolate-maker Barry Callebaut (BARN). You might never have heard of this wholesaler but you have probably eaten its products, which are sold by better-known retailers such as the Cadbury-owner, Mondelez (MDLZ), and the KitKat-maker, Nestlé (NESN). The world's biggest chocolate-maker provides another example of how it can pay to be sceptical about talk of trade wars and instead believe that commercial relations will continue, despite shocks along the way. Barry Callebaut shares I bought for 766 Swiss francs in April now cost SwFr1,008. This is an increase of 31 per cent in little more than three months, which tastes sweet enough to me. On a sour note, Adidas (ADS), the German sports goods group, said Trump's tariffs would add €200 million to its costs because it makes 30 per cent of its trainers in Vietnam. That tripped up the share price, which plunged 18 per cent last week, causing this stock to fall out of my top ten. Ouch! • FTSE 100 slides as markets retreat on new Trump tariffs Higher taxes are bad for business, whatever opponents of free trade may say, because they transfer wealth from consumers and shareholders to governments. This explains why shares in the Dutch brewer Heineken (HEIO) slipped 7 per cent on Monday, despite it reporting higher than expected profits. Dolf van den Brink, the chief executive of the business, whose brands also include Amstel and Foster's, pointed out that the beer it exports from Mexico to America continues to face 30 per cent tariffs. He said Heineken is considering shifting more production to America, adding: 'We look at all options from continuing with our current set-up, a more hybrid version, or otherwise.' Amid all that anxiety and uncertainty, Heineken looks a bit hungover. But shares I bought for €45 in January 2014 were trading at €60 on Friday, yielding 3.2 per cent dividend income, so I intend to retain a glass half-full view of this global business. Similarly, easily my biggest European shareholding is the Paris-listed Franco-Italian firm EssilorLuxottica (EL), which makes a third of all the optical lenses on this planet. Its best-known retail brands are the American sunglasses makers Oakley and Ray-Ban, which now offer artificial intelligence-enhanced eyewear via a joint venture with the Facebook and Instagram owner, Meta Platforms (META). Sales of more than two million smart glasses since October 2023 suggest EssilorLuxottica is succeeding where earlier attempts at wearable technology failed. Google Glass, internet-enabled specs from the technology giant Alphabet (GOOGL), were largely withdrawn a decade ago and discontinued completely in 2023. • A 20% return in 4 months? I'm riding the investment trust wave But Oakley and Ray-Ban models, such as the classic Wayfarers, spare customers the embarrassment of feeling conspicuous and sales are rising strongly. While I have no wish to see share prices flashed up before my wondering eyes, this baby boomer likes the sound of discreet hearing aids, hidden away in stylish shades or spectacles. Either way, EssilorLuxottica shares I bought for €96 in March 2019 were coming through loud and clear at €259 on Friday and are now my fourth-most valuable holding. It all goes to show why it can pay to look through short-term fears and instead invest in long-term hopes that international trade will eventually return to something nearer business as usual. Even world-leading European healthcare companies cannot guarantee that shareholders will always enjoy healthy returns. Novo Nordisk (NOVO), the Danish pharmaceutical firm that was first to obtain authorisation for weight-loss wonder drugs, suffered a 25 per cent share price shrinkage last week. A profits warning wiped €60 billion off what had been Europe's most valuable company. Sad to say, there may be worse to come as Novo struggles with American tariffs, copycat drugs and the risk that it could become collateral damage in Trump's improbable bid to take over Greenland, which is a protectorate of Denmark. Yes, really. Mr Market is a manic depressive at the best of times, lurching from excessive exuberance to the depths of despair, and the drugs don't help. Despite the widespread popularity of Ozempic and Wegovy flab jabs, Novo has lost 66 per cent of its stock market value over the past year. What a downer! Fortunately, I first invested more than four years ago, when few Brits had heard of this business, paying 254 Danish krone per share in June 2021, allowing for a subsequent stock split. Then I sold a five-figure parcel at DK926 last August, as also reported here at those times. They fetched just DK309 on Friday. This raises the important point that it is never too soon to take a profit. If nothing else, we need to turn paper gains into real ones to compensate for losses elsewhere. Another Danish pharma firm, Bavarian Nordic Research Institute (BAVA), where I paid DK258 last August, had slumped to DK123 before it recommended a takeover bid at DK233 on Monday. We can't win them all. Full disclosure: Ian Cowie's shareholdings
BBC News
6 hours ago
- BBC News
How South Korea's K-beauty industry is being hit by Trump tariffs
Cars and smartphones may rank among South Korea's biggest exports to the US, but few goods inspire a more devoted following than the Asian country's beauty products.K-beauty - a term that covers a wide range of skincare, makeup and cosmetics from South Korea - is lauded for its quality and value, driving soaring demand in recent global appeal of South Korean culture has also helped propel the popularity of its Pearl Mak tells the BBC that she was introduced to K-beauty products by her friends. South Korean serums are better-suited for her skin compared to some Western brands that tend to be more harsh, the 27-year-old graphic designer "95% of my skincare is made up of K-beauty products", she Mak is not alone in her preference for South Korean skincare brands. Americans spent as much $1.7bn (£1.3bn) on K-beauty products in 2024, according to industry estimates. That marks a more than 50% rise compared to the previous year.K-beauty products are often more attractively priced than their Western counterparts - but also feature ingredients that are not as commonly found in the West - from heartleaf to snail mucin. US President Donald Trump has now imposed a 15% import tax on South Korean goods traded between Seoul and Washington. It's less than the 25% levy that Trump had threatened, but many consumers are not taking any chances. US K-beauty retailer Santé Brand saw orders spike by nearly 30% in April, right after Trump unveiled sweeping US import taxes on most of the world."When the tariff announcements hit, customers got strategic with how they were going to weather the storm," Santé Brand's founder Cheyenne Ware told the BBC. "Consumers are preparing against the uncertainty."Another K-beauty retailer, Senti Senti, has been ordering more products since Trump started his tariff threats, says manager Winnie Zhong. This week, she received alerts from suppliers urging retailers to "stock up before tariffs".Both retailers said prices of K-beauty products are likely to increase as the levies push up costs across the industry."Anyone telling you prices will stay flat through the next two years is naive," says Ms are bound to rise, especially for smaller sellers of beauty products on platforms like Amazon, who operate with slim profit margins, economist Munseob Lee from the University of California San Diego higher prices, the global popularity of South Korean culture means K-beauty products are likely to remain in demand in the US, he says."Casual buyers might be turned off by the higher price, but fans won't find an easy substitute."Ms Zhong agrees. She thinks customers will still want to buy K-beauty products but price rises may mean they purchase fewer items than prices are unlikely to stop Ms Mak buying her favourite products."It depends on how much the price shoots up, but as of now, I am willing to pay more to purchase the same products," she says. 'No easy substitute' Big K-beauty brands are in a much better position to absorb the cost of tariffs than their smaller rivals, says South Korea-based business consultant Eyal Victor larger companies will be able to avoid major price rises for their customers as they have higher profit margins, he smaller K-beauty firms that make their products in South Korea will struggle to keep a lid on costs, Mr Mamou adds."It will take some time to take effect since most goods being sold in the short-run have already been commissioned at current prices, but we'll see it play out soon." In recent days, President Trump has struck deals with Japan and the European Union that will see their exports to the US subject to the same 15% tariffs as South means countries that are home to some of the world's biggest cosmetics brands face the same levies as the K-beauty to Trump's trade policies is his ambition to see more goods being made in it's yet to be seen whether or not this will mean US buyers switch to American beauty Mak says she doesn't see US-made products as attractive alternatives."I do search for American-made alternatives often, but I have yet to find any that are as effective as the ones I use. So I wouldn't go for American products yet."
Daily Mail
7 hours ago
- Daily Mail
HAMISH MCRAE: New Trump tariffs spoil the party
Donald Trump has proved a bit of a party pooper. There we were last week, celebrating strong results from Microsoft and other members of the 'magnificent seven' clan, plus some decent figures here from several of our biggest enterprises, and pretty spectacular ones from Rolls-Royce. The S&P 500 and FTSE 100 indexes of leading shares touched all-time highs. Trade negotiations seemed to be plodding along, with a decent deal between the US and the EU, even if businesses on the Continent were upset that it wasn't as good as the agreement that we in the UK got. Then, bang, the full list of tariffs was announced, coming into effect on Thursday for any country that had not closed a trade deal with the US. It includes some beefy figures. Switzerland was stunned to discover that it would be hit by a 39 per cent levy. You may not feel sorry for what is one of the richest countries in the world but it's rough on others. For example, South Africa gets 30 per cent and India 25 per cent. These figures will almost certainly be negotiated down and there are all sorts of exceptions. But meanwhile there is huge disruption. Until the end of last week the view of the markets was that global business was nimble enough to cope. Now they are not so confident. And it isn't only the Swiss enterprises that are being hit; it is also American ones. You see that best in the impact on Amazon. It produced some stunning results on Thursday and the shares were trading around their all-time high, valuing the company at well over $2.5 trillion (£1.9 trillion). Then came the details of the tariffs. Its share price fell by more than 7 per cent. It's silly to read too much into one day's market movement, but it's a useful reminder that Americans are being hit by Trump's trade policy, not just foreigners. We don't know how the cost of the tariffs will be carried. Some may be absorbed by exporters. But they can only do that for a while as we have seen when there are sharp currency movements. If the dollar suddenly weakens and they therefore receive less money in their own currency, exporters to the US eventually will have to increase their prices. What we do have is a feel for the extra revenue the US expects to receive. Scott Bessent, the Treasury secretary, estimates it will be an extra $300 billion a year. That's equivalent to about 1 per cent of national output. If a third of that ends up being paid by importers squeezing their margins and two-thirds by consumers in higher prices, that's a noticeable dent on living standards. Some items will go up by a big amount, and while many won't, the headlines will shock. The tax revenue will be useful, of course, but as the US federal budget deficit is running at 6 per cent of national output, it doesn't go far towards closing the gap. What happens next? Disruption is never good and even if, as seems realistic, world trade does settle down, there will be lasting costs from the tariff war. What will matter even more is whether, irrespective of all this, the US economy continues to grow at a decent clip. It managed to do so in the second quarter, at an annual rate of 3 per cent. But there are worries. Every time there's a weak number, as there was on Friday with jobs growth, the markets wobble. The housing market has gone soft in many areas. Consumer sentiment is fragile, though up a little in recent months thanks to booming share prices. So markets need to stay strong to maintain consumer confidence – and vice versa. It's a virtuous circle, but as we all know, that could flip. You can see why Trump is so hostile to the Federal Reserve chairman, Jerome Powell. The one thing that might ensure the boom continues a while longer would be a cut in interest rates. The Fed didn't move last week, while here the Bank of England is widely expected to reduce rates on Thursday. It was a stunning July for British investors and shares here remain solid value compared with US markets. The UK will probably gain from US tariffs, given the favourable deal we negotiated. But August will, I am afraid, be a less comfortable month.
