The Investment Column: BAT's Canadian deal fails to light up share price
Wednesday 04 August 1999
The deal was welcomed by analysts as it allows BAT access to Imasco's pounds 100m cashflow rather than just being able to consolidate the dividend payment. There should be further proceeds when BAT sells the remaining Imasco interests in retailing and property.
The deal aside, BAT's first-half figures would be enough to make any investor reach for a gasper. Operating profits edged up by 2 per cent to pounds 736m but were down by 9 per cent on an underlying basis. Volumes fell by 9 per cent in the first half, which includes a 12 per cent drop in the second quarter. Volumes have been hit by a price hike in the US to fund the Medicaid settlement. Elsewhere volumes have tumbled due to an export tax in Brazil and weak exports in Asia. BAT is expecting year on year improvements in the second half though the 29 per cent slump in volumes in the second half in Asia Pacific looks worrying. The drift in sales towards counterfeit sources is also a trend that could prove a longer term drain on the legitimate cigarette makers. But BAT is banking on a bounce back in Asia, eastern Europe and Latin America.
On the litigation front the record has been mixed with investor sentiment knocked by the class action in the US combined with aggressive noises being made by Al Gore in the presidential election race.
Much of this bad news is already in the share price which after an 18.5p drop to 516.5p yesterday is well off its highs of last year. Assuming profits of pounds 2bn in the year to 2000 the shares trade on a forward p/e of just 10. That may look cheap but BAT will need better news on trading before the shares light up. Hold.
Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'
Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance
Marvel has released first teaser trailer week early after it leaked online
- 1 As an ex prostitute, I urge all the political parties to commit to the Sex Buyer Law
- 2 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Couple die within 28 hours of each other after being married for 73 years
Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali: What is the festival of lights and how is it celebrated around the world?
Nelson Bunker Hunt dead: Former world’s richest man dies in 'modest circumstances' in US after losing his fortune
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...