Zimbabwe: Bat Shares Jump 39 Percent

Source from:  The Herald  03/07/2013

SHARES of British America Tobacco Limited, Zimbabwe's biggest cigarette maker, jumped as much as 39 percent after the company declared a hefty US42c per share dividend in the full-year to December 31, 2012.
 
The stock hit a record high US725,01c last Friday, as profits came in wider than expected. Yesterday, it slightly fell US0,01c to US725c.
 
BAT, one of the most capitalised stocks on the Zimbabwe Stock Exchange, said it will pay nearly US$6,8 million in dividends to shareholders, which is more than 50 percent of its US$12,3 million bottom line.
 
Since January this year, BAT is up 101 percent, becoming the biggest mover, and 202 percent year on year.
 
In the past 52 weeks, the share has averaged US234c and since dollarisation in 2009, its share price has rocketed from a low of US87c. Dividend yield was at 7,78 percent at the end of December last year. BAT is one of the very few local companies that have consistently rewarded investors through paying dividends.
 
During the review period, BAT's net profit climbed 151 percent despite a 11 percent decline in sales volume. Basic earnings per share rose to US71c from US28c a year earlier.
 
Turnover reached US$51,8 million, up 30 percent on prior year. The numbers beat forecasts by far, even the most optimistic. Analysts were expecting EPS of US50c, dividend of US37,5c and net income of US$10,3 million.
 
BAT says sales volume declined due to higher excise duties and higher retail prices of most cigarette brands.
 
However, premium cigarette brand Dunhill posted 43 percent volume growth. Madison, a popular local brand, contributed 68 percent of the sales volumes.
 
BAT has since finalised and complied with Zimbabwe's indigenisation and empowerment policies that have seen the company offering its workers some equity in the firm. The factors have already started reflecting in the company's share price.
 
Tobacco in Zimbabwe is this year expected to reach over 170 million kg. Firms such as BAT are seen capitalising on this exponential growth although excise duty pressures are rising from the Treasury, which is eyeing more revenue from cigarettes.
 
The company's managing director, Mr Lovemore Manatsa, is optimistic of a brighter future for the heavily capitalised company. Enditem