(Reuters) -British American Tobacco reported a 1.7% rise in first-half profit at constant currency on Thursday, beating expectations, helped by a return to growth of its business in the United States and demand for its Velo nicotine pouches.

BAT and peers such as Philip Morris, Imperial Brands, and Altria 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.

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)