LONDON, June 4 Reuters British American Tobacco expects a small decline in halfyear revenue and adjusted profit from operations, it said on Tuesday, but maintained its forecast of low single digit annual growth.

The maker of Dunhill and Lucky Strike cigarettes has been forced to temper its hopes for revenue and profit growth as it grapples with a tough environment in the United States, one of its key markets.

There, both the company39;s traditional tobacco business and its portfolio of newer products such as vapes are struggling as users switch out its more expensive brands for illegal disposable vapes or cheaper cigarettes.

The company said while the U.S. was showing some early signs of recovery, traditional cigarette volumes were down around 9 so far this year across the industry.

Chief Executive Tadeu Marroco said that investments which the company was making in its U.S. unit and elsewhere would set BAT up for a stronger future.

We expect growing momentum in the second half, enabled by the investments we are making today, he said.

BAT had already warned its performance would be weighted to the second half of the year and that the U.S. market and investments would drag on its results in the nearterm.

It said it expects halfyear revenue and adjusted profit from operations to fall by low single digits, but it was on track to deliver on its guidance for the full year.

It aims to build back to revenue growth of 35 by 2026.

Reporting by Emma Rumney; editing by…