BRITISH AMERICAN TOBACCO 2018 COOKIES

The cookies did not crumble for Kenya's British American Tobacco plc in the financial year ended December 2018 mainly because it paid less in finance charges, grew net revenue after duties faster and had some good hands on over operating costs.

The most impactful was the lone drop in cost head within the year: Finance costs. It went down by 21.5% to Ksh 388m from 2017's Ksh 494m to make BAT 's profit before tax grow by 20.8% to Ksh 5881m from Ksh 4867m.

Before it, operating profit had grown by lower 16.0% to Ksh 6215m from Ksh 5361m principally on the back of 11.1% gross profit growth realised from only 5.88% increase in gross revenue padded further padded by only 9.15% growth in operating costs.

BAT gross revenue had grown to Ksh 36,496m from Ksh 34,468m while in view of less than proportionate increase in duties paid, gross profit came to Ksh 20,700m from 2017's Ksh 18,674m.

In the end, operating profit rose by a higher % because operating cost grew by a % less than the gross profit increase.

Hence, all combined BAT ended the year with 16.1% profit margin compared to 14.1% in 2017 and this led to higher Ksh 3424m working capital surplus compared to Ksh 2091m in 2017 which indeed lead to another round of finance cost drop in 2019 year.

With Profit after tax rising to Ksh 4085m from Ksh 3336m, the directors recommended final dividend of Ksh 31.50 per share which added to interim earlier paid, brings full year dividend to Ksh 35 per share.

Yet, says BAT management, it could have been better. It says the drags on the year's performance were illicit trade in cigarette in Kenya; cost of work place transformation and incremental cost of new tax regimes plus inflationary pressures.

But then, the point is: BAT's cookies did not crumble in 2018 and its investors are smiling.

BRITISH AMERICAN TOBACCO Kshm, yr
                             2018.             2017
Gross revenue 36,496.           35,468
Gross profit.     20,750.           18,674
Operating cost 14,531.           13,313
Operating gain   6219.               5361
Finance cost         388.                 494
Profit b4 tax.        5881.             5867
Profit after tax.    5085.              3336
Profit margin%.     16.1.                14.1
Working capital   3424.              2091
Dividend.              3300.              2600

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more