Uganda: Batu Share Price Falls Despite Impressive Results

Source from:  The Monitor 03/24/2011

Kampala - The share price of British American Tobacco Uganda fell by more than half on Tuesday despite the good results released by the company on the same day. The company's share price shrunk to Shs800 from Shs1, 740 on Monday, representing a drop of 54.02 per cent, according trading statistics from the Uganda Securities Exchange where the firm is listed. Mr Arthur Nsiko, a research analyst at investment firm African Alliance attributed the decline to a single trade by Equity Stock Brokers, a brokerage firm that intended to clear its books when demand arose. "That wouldn't reflect the exact price because it was just from one broker. Supply came in at a lower price without reacting to the good dividend," he said. On Tuesday, BATU announced that it would pay its shareholders a dividend of about three times more than what they earned from the firm last year due to its improved performance. The cigarettes company, plans to pay out Shs158 per share to its shareholders this June, up from shs56 per share paid out to the beneficiaries last year. In total, the company will pay out over Shs7.7 billion to its owners, according to the 2010 audited financial results of the company released on Tuesday. "The dividend which is subject to withholding tax will be paid on or before June 15 to shareholders on the register at the close of business on April 30," said Mr Isaac Ampeire the BATU company secretary, in notes accompanying the results. Dividends are subject to a 10 per cent withholding tax in Uganda. The proceeds will come on the back of a 40 per cent and 36 per cent rise in the company's profit after and before tax, respectively, compared to what it recorded last year. The results show that BATU earned net profit of Shs11.2 billion in 2010 compared to Shs8 billion recorded the year before. But the company's profit before tax almost jumped to about Shs16 billion from Shs11.7 billion recorded two years ago. Mr Ampeire attributed the improved performance to an increase in cigarette prices during the year under review, improved cigarette mix, increased leaf exports and a favourable exchange rate. Enditem