British American Tobacco Plc, the world's second-biggest cigarette maker, reported signs that global economies were starting to improve as it matched forecasts with a 19% rise in annual earnings.
The London-based group, which makes Kent, Dunhill, Lucky Strike and Pall Mall cigarettes, gained a boost from price rises, acquisitions, and the weak pound which offset falling underlying volumes and downtrading to cheaper cigarettes.
The group posted 2009 adjusted diluted 2009 earnings per share (EPS) of 153 pence on Thursday largely in line with a ThomsonReuters I/B/E/S consensus of 152.6 p and a company conducted survey consensus of 152.9 p.
“There are signs that the global economy is beginning to improve, although unemployment, which is an important influence on our business may continue to rise in developed markets,” Chairman Richard Burrows said in a results statement.
Its underlying cigarette volumes fell 3% in 2009 hit by deteriorating economies, below its 1 to 1-1/2% annual growth target, but sales of its more expensive cigarettes grew with its top four key brands up 4%.
Profits were boosted by the acquisition of Turkey's Tekel and Denmark-based ST in 2008 and Indonesia's PT Bentoel last year, while it gained from the weaker pound against most major currencies and higher cigarette prices.
Annual revenue and adjusted operating profits rose 17% and 20%, but stripping out the effects of exchange rates both rises were 10%.
The full-year dividend, which is set at 65% of earnings, rose 19% to 99.5p a share.
Earlier this month, BAT's bigger rival Philip Morris International beat forecasts with its fourth-quarter earnings as price rises and emerging market growth from the Marlboro-making group offset volume falls in the European Union. (Reuters)