British American Tobacco (BAT) has posted a surge in profits despite recording a slight dip in revenue in its preliminary annual results.

The tobacco supplier oversaw a 1% year-on-year decline in revenue in 2025 to £25.6bn, although profit from the company’s operations saw a significant increase of 265% on the previous year, to total £10bn.

BAT said this was “largely due to the movement in the Canadian settlement provision”.

The FTSE 100 company stated that it had “accelerating momentum” through 2025 which has seen it deliver at the top end of its previously announced guidance.

In its new categories division, which includes vaping and nicotine pouch products, BAT added that this revenue was also “accelerating”, after returning to double-digit growth in H2, driven by strong Velo growth in all regions – which is the company’s tobacco-free nicotine pouch offering.

BAT also outlined plans for a £1.3bn share buyback scheme in 2026.

Chief executive, Tadeu Marroco, said that the company’s performance in 2025 “reinforces confidence” in sustainably delivering again in 2026.

“With this momentum, together with resilient combustibles delivery and further productivity initiatives, we are confident in sustainably delivering on our financial algorithm of 3-5% revenue, and 5-8% adjusted diluted EPS, with 2026 expected to be at the lower end of the range, as we continue to invest in our transformation,” Marroco said.

“Our strong cash flow is driving increased financial flexibility and we expect to be within our 2.0-2.5x target leverage range by end 2026.

“I remain committed to delivering sustainable shareholder value through robust cash returns, with progressive dividends and sustainable share buybacks, including £1.3bn programme for 2026.”

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