Zimbabwe: BAT Grows Despite Espionage Setback

Source from:  Financial Gazette (Harare)  03/08/2013

CIGARATTE manufacturer, British American Tobacco Zimbabwe (BATZ) said it would continue to promote sales growth across all their products after its net turnover increased by 30 percent to US$51,8 million from US$39,7 million for the year to December 31 2012.

The company's basic earnings per share rose to US71c from US28c the previous year on the back of an improved economic environment.
 
Dividend per share was US42c, up from US23c the prior year, while operating profit was US$12,3 million, representing a 151 percent improvement from the previous year.
 
Some market analysts had projected a decline in net turnover after BATZ was last year accused of spying on its competitors and adopting an industrial espionage strategy.
 
BATZ however denied these allegations which emerged after rivals- Kingdom, Savanna Tobacco, Breco (Fodya), Cutrag, Trednet and Chelsea - lost cigarettes valued at R100 million to armed hijackers in just over a year.
 
The cigarettes were mostly destined for South Africa.
 
None of BATZ's products were said to have been hijacked, prompting its competitors to believe the largest cigarette manufacturer in the country was involved.
 
In a statement accompanying the group's financial results, chairperson Kennedy Mandevhani said BATZ continued to lead the cigarette industry despite a decrease in sales volumes by 11 percent from the previous year.
 
"The decrease in sales volumes experienced across all our brands was largely attributed to the increase in excise duty and the retail selling price of cigarettes at the end of 2011," he said.
 
"The slowdown in Gross Domestic Product growth is also a contributory factor. However, Dunhill achieved outstanding volume growth of 43 percent as compared to the previous year since it is not a mass market brand," Mandevhani said.
 
He said export sales of rag volumes to Mozambique decreased by 16 percent against the same period last year after their leaf procurement process was revised and new sources identified.
 
"The business continues to take advantage of prominent brands, strong distribution network, high quality and good customer relations to maintain the industry leadership position," he said.

Mandevhani said the group expected to continue achieving improved results after successfully complying with the indigenisation law.
 
BAT Zimbabwe is 60 percent owned by BAT Plc and is one of several companies that had been targeted by government under a campaign to force foreign-owned companies to cede at least 51 percent of their shareholding to locals or government-appointed agencies.
 
Mandevhani said cigarette sales continued to be a major driver to national sales volumes, with the Madison brand contributing 68 percent as a result of improved marketing and distribution.
 
BAT Plc has a market-leading position in over 50 countries and operations in around 180 countries. Its four largest-selling brands are Dunhill, Lucky Strike, Kent and Pall Mall, with others including Kool, Benson & Hedges and Rothmans.
 
BAT has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalisation of £65,6 billion, the sixth-largest of any company listed on the London Stock Exchange. It has a secondary listing on the Johannesburg Stock Exchange.
 
The company was formed in 1902, when the United Kingdom's Imperial Tobacco Company and the British-American Tobacco Company Ltd. The parent companies agreed not to trade in each other's domestic territory and to assign trademarks, export businesses and overseas subsidiaries to the joint venture. Enditem