BAT, says boss Jack Bowles, is “uniquely positioned to encourage the switch to reduced risk products”. If so, it is proving shy in pressing its advantage. Last year, just 3m new customers began using non-combustible products such as Vype vapes. That gives a total of 13.5m — a rounding error for this London-listed tobacco company.

Big Tobacco needs new categories to grow, providing a cushion as litigation dents income and health-conscious new generations spurn cigarettes. But nicotine is a tough habit to break. BAT remains hugely reliant on tobacco, selling 638bn traditional cigarettes last year.

Vaping is not the get-out-of-jail card it was once hoped to be. Regulations, most recently a US ban on flavours that could appeal to children, have turned these aspirations — and valuations — to ash. Look at Juul. BAT’s peer Altria bought a 35 per cent stake in the vaping manufacturer in 2018 for $12.8bn and proceeded to take $11.2bn of writedowns.

Undeterred, BAT wants to use tobacco’s prodigious cash generation — some £2.6bn of free cash flow last year — to invest in new categories. These are targeted to hit revenues of £5bn in 2025. BAT hopes to have 50m customers for these new products in 2030.

Last year was a slow burn, undercutting tobacco’s reputation as a defensive investment. Industry forecasts anticipate flat to falling sales this year. BAT provided no guidance on the US, by far its biggest market, where margins are 50 per cent on an adjusted basis.

The company is looking for steady revenue growth of 3-5 per cent and earnings per share rising in mid-single digits on a constant currency basis. The strong pound means that is theoretical: BAT expects an FX headwind of minus 7 per cent, implying eps will be flat in a best case scenario and very possibly negative.

Tobacco stocks are cheap for a reason. Neither developing markets nor non-combustibles have created the growth trajectory chief executives once promised. Unless the sector can make new categories pay off, it will be in run off.

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