Upbeat forecast lifts BAT

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The Independent Online
Shares in tobacco to financial services conglomerate BAT Industries jumped 6.5p to 466.5p yesterday after chairman Sir Patrick Sheehy forecast a "substantial" increase in profits.

Shareholders would share in the spoils with a further "significant real increase in the dividend," he promised.

Speaking at the group's annual general meeting in London, Sir Patrick revealed that cigarette volumes had soared by 24 per cent in the first quarter, boosted by last December's acquisition of American Tobacco and recent investments in Russia and Uzbekistan.

But he said what had been particularly gratifying was the strong increase in exports of BAT's US international brands, while domestic volumes in Brazil had recovered strongly.

In financial services Sir Patrick said the prospects were for "worthwhile rather than spectacular growth".

Analysts were waiting until BAT's first-quarter figures, due next Wednesday, before raising forecasts for this year. But Nyren Scott-Malden of brokers Barclays de Zoete Wedd said Sir Patrick's comments had boosted sentiment.

He is holding to his prediction that profits will rise to £2.23bn from last year's figure of £1.8bn.

BAT's first quarter contrasted sharply with results from RJ Reynolds, the tobacco subsidiary of RJR Nabisco, which yesterday reported a 13 per cent decline in the first three months.