British American Tobacco's (BATS) first-half figures demonstrated the company's resilience in the face of slower conditions in some markets. Group operating profit grew by a solid enough 3 per cent to £2.81bn and - even though underlying cigarette volumes fell to 332bn - that slippage was still in-line with the industry's average decline of 2 per cent.
There is evidence, however, that consumers are continuing to trade down to cheaper brands. Lucky Strike sales, for instance, fell 7 per cent because of difficulties in Spain while, in contrast, revenues from budget brand Pall Mall grew 8 per cent. However, the overall segmental results showed that the group can still find growth where it counts. In Asia-Pacific, for example, higher prices and cost savings helped profits grow 9 per cent to £875m. Paradoxically, one of the strongest performing countries in the region was Australia, despite its introduction of plain packaging for cigarette packets. The other growth area - the Eastern Europe, the Middle East and Africa unit - saw underlying profit grow 13 per cent to £764m, with pricing the main reason for this. Meanwhile, struggling European economies, like those of Italy and Spain, meant underlying profit from western Europe was essentially flat at £573m.
Broker Panmure Gordon expects full-year adjusted EPS of 225p, (2012: 207p).
BRITISH AMERICAN TOBACCO (BATS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,483p | MARKET VALUE: | £66.4bn | |
| TOUCH: | 3,483-3,484p | 12-MONTH HIGH: | 3,808p | LOW: 3,061p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 365p* | NET DEBT: | 145% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 7.45 | 2.85 | 98.0 | 42.2 |
| 2013 | 7.57 | 3.00 | 107 | 45.0 |
| % change | +2 | +5 | +9 | +7 |
Ex-div: 21 Aug Payment: 30 Sep *Includes intangible assets of £11.9bn, or 625p a share | ||||
