The weakness of the Russian rouble and Ukrainian hryvnia clouded reported figures from British American Tobacco (BATS). But strip out currency shifts and revenue rose 2.4 per cent to nearly £7bn, driving adjusted operating profit up 1.3 per cent to £2.7bn.
As usual, the growth was all about higher prices. Chief executive Nicandro Durante reported that volumes were down 2.9 per cent to £322bn, but that was better than the industry decline of roughly 3.5 per cent. The market is shrinking, in part due to duty-related price increases in Russia, Australia and South Korea.
BATS benefited from the completion of the mooted takeover of Lorillard (US:LO) by Reynolds American (US:RAI), in which the group has a 42 per cent stake, and completed its planned $4.7bn cash investment in the enlarged business. Moreover, BATS plans to acquire central Europe-focused TDR from Adris Grupa for €550m, and is eyeing up the remainder of Brazilian subsidiary Souza Cruz.
Away from old-fashioned cigarettes, the group's 'next generation' products also made headway. Its Vype e-cigarette brand is performing well and other launches are planned.
Analysts at Panmure Gordon expect pre-tax profits of £5.5bn this financial year, giving EPS of 207p, up from £4.9bn and 208p in 2014.
| BRITISH AMERICAN TOBACCO (BAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,652p | MARKET VALUE: | £68.1bn | |
| TOUCH: | 3,651.5-3,653p | 12-MONTH HIGH: | 3,894p | LOW: 3,303p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 321p* | NET DEBT: | 222% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 6.80 | 2.61 | 93 | 47.5 |
| 2015 | 6.40 | 3.50 | 142 | 49.4 |
| % change | -6 | +34 | +53 | +4 |
Ex-div: 20 Aug Payment: 30 Sep *Includes intangible assets of £10.1bn, or 543p a share | ||||
