British American Tobacco plc announced a £1.3 billion share‑buyback program for 2026, with the first tranche scheduled to be executed between 2 January and 11 February 2026. The buyback follows a £900 million program for 2025 and a £1.6 billion program launched in 2024, underscoring the company’s commitment to returning capital to shareholders while maintaining a disciplined balance sheet.
The company reaffirmed its 2025 outlook, projecting approximately 2 % growth in both revenue and adjusted operating profit. For 2026, management indicated that performance would likely fall at the lower end of its mid‑term growth algorithm—3‑5 % revenue growth and 4‑6 % adjusted profit growth—reflecting regional headwinds and softer trends in parts of its heated‑tobacco portfolio. BAT also reiterated its progressive dividend policy and its target leverage ratio of 2.0‑2.5 times adjusted EBITDA by the end of 2026, a goal supported by the sale of its stake in ITC Hotels.
New‑category sales drove the company’s momentum, with double‑digit growth in the second half of 2025 and a projected mid‑single‑digit increase for the full year. In the United States, Velo Plus achieved triple‑digit revenue growth, becoming the second‑largest volume and value share in the market, while Vuse and Glo continued to gain traction. These results reinforce BAT’s strategic shift toward a smokeless portfolio, which is expected to offset declines in traditional cigarette volumes.
The share‑buyback is part of a broader strategy to reduce leverage and strengthen the company’s capital structure. By returning cash to shareholders and lowering debt, BAT aims to maintain a robust dividend stream and preserve flexibility for future investments in high‑growth categories. The sale of the ITC Hotels stake, which generated significant proceeds, further supports the company’s 2026 leverage corridor and signals confidence in its long‑term growth plan.
Chief Executive Officer Tadeu Marroco emphasized that full‑year delivery remains on track and highlighted the company’s momentum in the U.S. market. He noted that Velo Plus is on track for full‑year profitability and that the company remains confident in delivering its mid‑term growth algorithm next year. Marroco also confirmed that the proceeds from the ITC Hotels transaction will help advance the 2026 leverage target, underscoring the company’s disciplined approach to capital allocation.
Market reaction to the announcement was muted, with shares falling in early trading. Analysts cited the tempered 2026 growth outlook as the primary driver of the decline, noting that investors had been anticipating stronger forward guidance following the company’s recent share price rally. Despite the drop, the buyback program is viewed as a positive signal of management’s confidence in the company’s cash‑generating ability and its commitment to shareholder returns.
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