British American Tobacco Shares Fall on LFL Volume Decrease -- Update
February 22 2018 - 5:42AM
Dow Jones News
(Adds information on cigarette volumes, adjusted organic
operating profit, comment from Accendo, and share price)
By Carlo Martuscelli
Shares of British American Tobacco PLC (BATS.LN) were down in
early trade Thursday after the company said that it sold fewer
cigarettes and other tobacco products on a like-for-like basis in
2017.
The producer of Lucky Strike and Dunhill cigarettes said that
its volume of cigarettes and tobacco-heating products sold over the
year--excluding the impact of the acquisition of Reynolds American
Inc. (RAI)--declined by 2.6%. The company said that the decrease
was experienced across all regions.
Mike van Dulken, head of research at Accendo Markets, said that
falling volumes could become a problem unless the company could
keep increasing prices.
The company noted that its falling volumes were better than the
market overall, which declined by an estimated 3.5%.
The tobacco company posted a pretax profit of 29.59 billion
pounds ($41.30 billion) for the year ended Dec. 31 compared with
GBP6.25 billion in the previous-year period. Revenue increased 38%
to GBP20.29 billion, it said.
Net profit was GBP37.53 billion, up from GBP4.65 billion the
year before.
The sharp increase in profit was attributable to the acquisition
of Reynolds American, which resulted in a gain of GBP23.29 billion,
as well as deferred tax credits from U.S. tax reform.
Adjusted organic operating profit at a constant exchange rate,
which excludes the impact of currency movements and acquisition,
was up 3.7% at GBP5.68 billion.
BAT said the company had established a new strategic portfolio
of brands that combined its existing Global Drive Brand portfolio
with the strategic brands that were part of RAI--which include
Camel, Newport and Natural American Spirit--as well as its
reduced-risk products.
Shares of BAT at 1009 GMT were down 226 pence, or 5.1%, at 4,223
pence.
Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com
(END) Dow Jones Newswires
February 22, 2018 05:27 ET (10:27 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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