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BAT blazes on

Cape Town - Cigarette conglomerate British American Tobacco [JSE:BTI] on Wednesday reported encouraging market share growth from its "big four" global drive brands. This helped lift both half-year revenue and operating profits to end-June by 8% to £7.3bn (R80bn) and £2.3bn (R26bn) respectively.

BAT's big four brands are Pall Mall, Kent, K Lucky Strike and Dunhill.

BAT chairperson Richard Burrows said the four brands managed good overall volume growth of 6% after the successful launches of a number of innovations.

He disclosed that Dunhill was up 21% thanks to brand migrations in Brazil and SA and strong growth in the Middle East, Russia and France.

Lucky Strike volumes edged up 1% and Pall Mall was up 7%. Burrows said Lucky Strike volumes were slightly up, with growth in many markets partially offset by declines in main markets like Germany and Spain.

He said Pall Mall showed growth in Germany, Uzbekistan, Italy, Spain, Pakistan and Chile.

Kent volumes fell 4% due to industry declines in its main markets in Romania and Russia. Burrows said Kent still managed to gain market share in its main markets, despite the volume decline.

BAT's cigarette volumes for the interim period were 348 billion, roughly in line with the same period last year.

While Burrows said market share of BAT's top 40 markets increased on an organic basis, volumes were down 3% on the back of market declines in Romania, Turkey, Japan and Pakistan.

BAT's basic earnings come in 5% higher at 76.9 pence, prompting the board to hike the dividend 19% to 33.2p/share.

Burrows contended the results showed that BAT's business was in "very good shape" with continued pricing momentum, increasing market share in key markets and improving organic volume trends.

He said while the comparisons with 2009 would become tougher in the second half, shareholders should see another year of good growth in both earnings and dividends.

The interim results were welcomed by the market, with BAT shares edging up to R256.50 on the JSE in Wednesday morning trade.

 - Fin24.com
 
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