BAT’s key cigarette brands increased sales

BAT Lucky Strike Pall Mall

A strong performance from British American Tobacco’s key brands, Pall Mall and Lucky Strike, aided the cigarette maker to display full-year outcomes that shrugged off the consequences of dropping overall cigarette usage and a rising black market.

Organic volumes dropped 2%, as smokers switched to cheaper cigarettes. Such trade increased in several countries, but not in every market. Nicandro Durante, chief executive, said: “It’s not global, it’s country by country.”

Smokers also switched to fine-cut “roll-your-own” tobacco, especially in Western Europe, where volume increased 8% as smokers searched for cheaper avenues for nicotine.

BAT now makes up 12.7% of world duty-paid tobacco, with growth among its flagship brands helping the company get market share. Volumes of Lucky Strike went up 11% every year, while Pall Mall increased 3%.

Profit before tax grew 14.3% to £5.6bn for the year to December 31 2012, as operating margins increased more than the market expected, leaping 160 bps year on year to 37.4%.

Income dropped 1% to £15.2bn. Earnings increased 4% at constant currency rates.

BAT declared a new board position to focus on its fast growing new products division, concentrating on products such as e-cigarettes, which are less harmful than regular cigarettes and can be used in indoor public places where smoking bans run.

Management ignored the release of legislation to ban smoking in public in Russia, BAT’s second-biggest market, due to take effect this year.

The cigarette company released a further £1.5bn share buyback programme, after buying back £1.25bn of shares in 2012.

Shares in the company grew 0.1% to £34.19 during trading, up about 8% over the past year.

Similar Posts:

Leave a Reply

Your email address will not be published. Required fields are marked *