BAT looks to overseas for profits hike
A strong performance in emerging markets helped BAT turn in better than expected first-half profits yesterday
Europe’s largest cigarette maker, whose brands include Dunhill, Kent, Lucky Strike and Pall Mall, reported a 16 per cent rise in profit from operations to £1.72bn from £1.49bn a year earlier. The reported group revenue increased by 15 per cent to £5.45bn from last year’s £4.72bn.
Michael Prideaux, BAT’s director for corporate and regulatory affairs, told CityA.M.: “We had excellent results with all our brands, but particularly with our premium brands and our global brands.”
He said that emerging markets were behind the company’s good performance. “We have a balanced business and make lots of volume sales in the emerging markets. Some of them, including Russia and Brazil, are experiencing no economic downturn, they are in fact booming,” he added.
“Obviously, no one is totally immune from the current economic uncertainty, but in our sector what drives slowdown is rather unemployment,” he said.
Charles Stanley analyst Tina Cook said that one of the reasons behind BAT’s good performance was a geographically widespread business, covering many ranges of tobacco products in many different markets.
She said: “What makes the emerging markets more successful is a more favourable environment, whereas in the UK, France and other EU countries there are smoking restrictions and a stricter legislation that affect sales.”
BAT’s cigarette volume rose one per cent compared to last year.
