British American Tobacco delivered a resilient performance despite coming up against some stiff headwinds including unfavourable exchange rates, the threat of a renewed round of regulation and a series of one-off events that boosted last year's figures such as the import boom that followed the tsunami in Japan. In fact, BAT's impressive range of global brands delivered a 6 per cent cent hike in operating profits in constant currencies.
That resilience was illustrated in Western Europe where economic problems in the region and a rise in illicit trade led to volume contraction of between 6 per cent and 10 per cent in Italy, Spain and Belgium, said chief executive Nicandro Durante. However, a strong trading performance in the eurozone's strongest economy, Germany, which was buoyed by market share gains for Lucky Strike, Pall Mall and Vogue in a falling overall market, meant underlying profits for the region were 2 per higher at £558m.
The withdrawal from Syria due to international sanctions failed to hold back trading in Eastern Europe, Middle East and Africa as the region posted a 15 per cent hike in profits to £97m driven by price rises and volume growth. In the Americas, where BAT benefited from acquisitions last year, currency headwinds were strongest and hit the Brazilian market in particular. Still, the segment produced a 5 per cent profit rise to £754m when these factors are stripped out.
Brokerage Jefferies Securities forecasts full-year adjusted EPS of 211p, up from 195p last year.
BRITISH AMERICAN TOBACCO (BATS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,267p | MARKET VALUE: | £63.6bn | |
| TOUCH: | 3,266-3,268p | 12-MONTH HIGH: | 3,445p | LOW: 2,466p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 386p* | NET DEBT: | 125% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 7.43 | 2.78 | 94.5 | 38.1 |
| 2012 | 7.45 | 2.87 | 98.9 | 42.2 |
| % change | - | +3 | +5 | +11 |
Ex-div: 15 Aug Payment: 26 Sep *Includes intangible assets of £2.91bn, or 150p a share | ||||
