BAT complains illegal cigarette trade is hurting sales in SA
By Robert Laing - Jul 27th 2017, 10:41
British American Tobacco (BAT) complained of "the growth in illicit trade" causing its South African cigarette sales and profits to decline.
"Volume and profit fell due to down-trading and the growth in illicit trade" BAT said in its results regarding SA for the six months to end-June released on Thursday morning.
"Benson & Hedges and Dunhill continued to grow market share although this was more than offset by Peter Stuyvesant, with total market share down."
The group reported a 16% jump in revenue to £7.7bn, but aftertax profit declined by 14% to £2.3bn.
BAT declared an interim dividend of 56.5p, 10% higher than the 51.3p paid in the first half of 2016.
"The relative weakness of sterling led to a significant tailwind on our reported results, with revenue 15.7% higher and profit from operations up 16.3% at current rates of exchange," CEO Nicandro Durante.
BAT completed its acquisition of the 57.8% of Reynolds it did not already own on Tuesday.
"If the acquisition had occurred on January 1 2017, before accounting for anticipated synergy and restructuring benefits, it is currently estimated that group revenue would have been £12.6bn and group profit from operations would have been £4bn for the six months to June 30."
"This is after charging £26m for the amortisation of acquired intangibles, an uplift to the fair value of inventory of £540m and £212m in respect of integration and acquisition costs," the results statement said.
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