The taxes it pays are almost double its revenues.
Jump to full article: Moneyweb (za), 2010-03-29
Author: David Carte*
Intro: Every cigarette packet these days carries a dire health warning - but British American Tobacco (JSE:BTI) CEO Paul Adams has no doubts about the health of his company.
In the annual report on one of the JSE's biggest market caps (R507.5bn) Adams writes: "I look forward to many successful years for our business."
Never mind the slings and arrows of the anti-tobacco lobby and the worst recession since the 1930s, BAT managed to raise revenues 10% to ₤14bn and earnings by 19% on a 1% volume rise because of "favourable pricing and resilient brands". It raised profit from operations by 20% to ₤4.4bn. Earnings in the decade have grown at a compound rate of 11% pa.
BAT has given shareholders an all-in return (dividends and share price gains) of 15.5% pa in the past three years, compared to the FTSE's average of 1.3% pa.
What's really remarkable is that BAT flourishes in spite of anti-smoking campaigns in virtually every jurisdiction in which it operates.
Adams reports that global cigarette consumption is more or less stagnant at 6trn cigarettes a year but as the adult population grows, particularly in developing countries, more and more new consumers are hooked.
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