BAT Kenya HY 2016 Results: Finance Costs Cut, Pre Tax Profits Surge by 11%

Earnings Release

Image Source: Telegraph

Profile

British American Tobacco Kenya Ltd is a Kenya-based company.

The Company is engaged in the manufacture and sale of cigarettes and tobacco.

The Company manufactures and sells cigarettes to distributors and fellow subsidiaries of the ultimate parent company.

Its parent company is British American Tobacco plc.

Half Year 2016 Financials

BAT Kenya released its results, the main theme that arose is improvement on cost efficiency.

Revenues slowed down by 1.5% to KES 10.394 Billion compared to KES 10.549 Billion to a similar period in 2015. Regardless of their slight down tick in revenues, the sweet spot emerged from lower finance costs which led to a better bottom-line whereby Profits Before Tax surged by 11% to KES 3.1 Billion.

Earnings per share stood at KES 21.48 vs 19.41 (HY 15) +10.7%

Contribution to Government revenues in the form of Excise Duty, VAT, PAYE and Corporation Tax increased by KES 1.9 Billion to KES 9.8 Billion which the company attributes to the higher excise duty imposed from the implementation of the new excise duty regulations in December 2015.

The Board of Directors recommended an interim dividend of KES 3.50 per ordinary share.

Download: BAT HY 2016 Financials.pdf

Share Price

On Thursday, BAT Kenya closed at 865.00, 0.46 % below its 52-week high of 869.00, set on Mar 22, 2016.

Current Performance Review:

YTD +8.13%

1 Yr +6.27%

3 Yrs +54.46%

5 Yrs +239.22%

10 Yrs +350.52%

As shown above year to date BAT is up by 8.13%. The 10 Year chart below just demonstrates how BAT’s strong financials have been reflected in its securities pricing.

BAT Ride.JPG

As it is our practice in tracking Institutional Shareholder movements we spotted the following in the chart below:

Just to note State Board of Administration of Florida Retirement System have been really active in Kenya lately, some of their other holdings from the data we have are:

  • Bamburi Cement
  • EABL
  • Equity Group
  • Kenya Commercial Bank
  • Safaricom
  • Scan Group

Conclusion

BAT is a no brainer have a look at their 5 to 10 year financials and do the math, enough said.

Sources: ( BAT, Kenyan WallStreet, FT)

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