Brazilian sales bolster BAT smokes to record profit
Thursday 04 May 1995
Results released yesterday by the tobacco to financial services conglomerate showed that the pre-tax total rose 19 per cent to £498m in the three months to March, surprising many analysts, who were already braced for good figures after an upbeat forecast by the chairman Sir Patrick Sheehy last week.
After a strong run upwards from 443p two weeks ago, the shares lost 3p to 474p yesterday.
Sir Patrick said: "All in all, the year has got off to a very good start for BAT Industries . . . Despite a more normal tax rate in 1995, we will continue to reward shareholders with a significant real increase in the dividend."
BAT said tobacco volumes had jumped 24 per cent in the latest three months, boosted by the year-end acquisition of American Tobacco, and a strong recovery at Souza Cruz, the Brazilian subsidiary. A new economic stabilisation plan mid-way through the year helped cigarette sales in the country jump.
Souza Cruz yesterday reported net income of 32.9m Brazilian reals (£22.2m) for the first quarter of 1995, after a loss of 25.9m last time.
Around 8 percentage points of BAT's volume increase was due to the turnround in Brazil, with a further 10 points coming from acquisitions in the US, Russia and Uzbekistan.
The rise, including 6 points of organic growth, fueled a 27 per cent increase in tobacco profits to £335m.
BAT said American Tobacco, which raised its market share from 11 to 18.5 per cent in the US, was living up to expectations in terms of volume and financial benefit. BAT warned that its market share would slip by about 1 per cent once the Montclair brand was sold to satisfy the Federal Trade Commission. But American Tobacco remains on track to meet forecasts at the time of acquisition that it could double last year's profits of $200m over the next two years.
Meanwhile, a £200m expansion is on track to double production capacity at Southampton for State Express 555, the favorite cigarette of Mao Tse- Tung and now the leading international brand in the Far East.
The continuing bad publicity surrounding private pensions and other personal financial services hit premium income at Allied Dunbar, one of BAT's two UK insurance businesses. Total premium income slumped 24 per cent to £346m, with poor stock market performance blamed for a 56 per cent slide in the single premium investment product business.
There were also clear signs that the insurance cycle is turning down in the 8 per cent fall to £676m in gross premium income at Eagle Star, the other UK business. Despite static profits from the two British businesses, a 14 per cent increase in profits from Farmers, the California mutual insurer managed by BAT, pushed trading profits from financial services 10 per cent ahead to £240m.
- 1 Unseen Charlie and the Chocolate Factory chapter deemed 'too subversive' released
- 2 Ebola virus: It's ripped through towns – now the deadliest ever outbreak of the virus is heading for Africa's teeming cities
- 3 Joan Rivers: 'Palestinians deserve to be dead'
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Israel-Gaza crisis: YouTube footage shows scale of destruction after 50 days of shelling
Keira Knightley topless: Conservative actress does own take on #Freethenipple campaign for Interview Magazine
iPhone 6 'hidden code' could indicate sharper screens or bigger phones
Joan Rivers: 'Palestinians deserve to be dead'
Ebola virus: It's ripped through towns – now the deadliest ever outbreak of the virus is heading for Africa's teeming cities
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
£40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...
£40000 - £70000 per annum + benefits+bonus+package: Harrington Starr: Data Ana...
Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...