British American Tobacco Plc. (BTI,BATS.L) reported Thursday a higher profit for its fiscal 2012 even as revenues declined on adverse currency movements. The company said its underlying market share grew, with good share momentum in the second half. Pricing remains strong.
The Tobacco products maker announced higher dividend, and approved up to 1.50 billion pounds share buy-back program for 2013.
Chairman Richard Burrows said, "BAT delivered strong profit growth in 2012, achieved through good pricing and an outstanding improvement in operating margin, partially offset by adverse exchange rate movements. Despite the difficult trading conditions in many parts of the world, particularly southern Europe, these results demonstrate the Company is in excellent shape..."
In fiscal 2012, pre-tax profit increased to 5.65 billion pounds from 4.93 billion pounds last year. Earnings per share improved to 197.1 pence from 156.2 pence in the previous year. Adjusted earnings per share, which excluded certain items, grew 7 percent to 207.5 pence.
Revenue for the year edged down 1 percent to 15.19 billion pounds on adverse currency movements. Revenue at constant currency rose 4 percent to 16 billion pounds reflecting continued good pricing momentum.
Meanwhile, group volumes fell 1.6 percent to 694 billion, principally as a result of industry volume declines in some larger markets. Organic volumes were down 2 percent.
The company's other tobacco products performed well, with Fine Cut tobacco increasing 8 percent in Western Europe.
The four Global Drive Brands, such as Dunhill, Kent, Lucky Strike, and Pall Mall, grew volume by 3 percent and increased market share by 30 basis points, driven by the successful roll-out of innovations.
The company said it achieved a substantial improvement in operating margin of 160 basis points, exceeding target of 50 to 100 basis points growth each year, benefited by growth in all four regions.
Further, British American said its Board recommended a final dividend of 92.7 pence per share for 2012, taking the total dividend to 134.9 pence, an increase of 7 percent.
Looking ahead, Chief Executive Nicandro Durante said, "While we cannot underestimate the challenges ahead in 2013, I am confident that we have robust plans in place and the resources to succeed. We have momentum, proven capabilities and passionate people to deliver another year of good growth and I look forward to 2013 with optimism."
In addition, the company said it has appointed Des Naughton, currently Group Operations Director, to the newly created role of Managing Director - Next Generation Products, effective March 1. Alan Davy, currently Group Head of Supply Chain, will take over as Group Operations Director.
In London, British American Tobacco shares are currently trading at 3,417.16 pence, up 1.16 pence or 0.03 percent.
by RTT Staff Writer
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