BAT increases its dividend in a flying start
BRITISH American Tobacco (BAT) yesterday hiked its dividend by nearly a fifth after a better-than-expected start to the year.
The world’s second-largest tobacco group declared an interim payment of 33.2p a share, up 19 per cent on the 27.9p it paid at the same stage last year.
Revenues in the first six months of the year jumped eight per cent to £7.3bn. Profits were up by the same amount to £2.27bn.
The company, whose cigarette brands include Dunhill, Lucky Strike and Pall Mall, said it was able to raise some prices and had seen an increase in its market share.
Chairman Richard Burrows said: “While the comparisons with 2009 will become tougher in the second half, shareholders should see another year of good growth in both earnings and dividends.”
Stripping out acquisitions, volumes for the half were down three per cent after a four per cent slump in the first quarter and a 1.9 per cent fall in the second.
BAT hopes sales will be down less than two per cent in the second half.
The firm has been hit by sharp increases in tobacco duties in countries such as Romania, Turkey, Japan and Pakistan which has encouraged illicit trade.
“The company is cautiously optimistic it is past the worst of the recession,” said analyst Adam Spielman at Citi.