29th Jul 2015 13:37
LONDON (Alliance News) - British American Tobacco PLC on Wednesday reported growth in profit in the first half of 2015, although revenue was hit by adverse exchange-rate movements, but BAT said it remains confident it will deliver an improved performance in the second half.
The FTSE 100-listed tobacco company reported a rise in pretax profit in the six months to June 30 to GBP3.5 billion from GBP2.6 billion, as revenue grew 2.4% at constant currency rates to GBP7 billion from GBP6.8 billion, but declined 5.9% to GBP6.4 billion at current rates. It said that revenue was driven by good pricing, but was hit by negative currency movements.
BAT will pay an interim dividend of 49.4 pence, up from 47.5p, and said it will increase its full-year dividend as well.
"As we anticipated, the first half of the year has been impacted by adverse exchange rate movements and a strong first half volume comparator. The underlying performance of the business remains strong, and we are confident that we are on course to deliver an improved second half, leading to another year of good earnings growth at constant rates of exchange. Underscoring our commitment to growing shareholder returns we intend to reflect this good underlying performance with an increase in the full year dividend," Chairman Richard Burrows said in a statement.
Analysts at Panmure Gordon believe that the adjusted earnings per share consensus for BAT's full financial year will not change materially following BAT's interim results but said that the full year will remain tough due to currency headwinds and with profit under margin pressure.
BAT said its operating margin was maintained in the first half at actual currency rates at 39.2%, despite the negative foreign exchange impact, as it focused on reducing its cost base.
Cigarette volume was 322 billion, a decline of 2.9%, although this was against an estimated industry decline of approximately 3.5% following significant excise-tax driven price increases in Russia, Australia and South Korea, BAT said.
Its market share in its key markets continued to grow strongly, driven by the Global Drive Brands which increased volume by 6%. The group's key markets represent over 70% of total volume.
Shares in BAT were trading up 3.1% at 3,660.50 pence Wednesday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
British American Tobacco