BAT boosted by growth in Asian market
BRITISH American Tobacco (BAT) has defied expectations to boost profits by 12.4 per cent to £4.9bn, buoyed by strong growth in its Asian division.
It used the results to announce plans to buy back £1.25bn of its own shares and increase its dividend for the year by 11 per cent.
But the world’s second biggest cigarette manufacturer warned of continued problems with cigarette smuggling and health campaigners’ and regulators’ attempts to ban displays and introduce plain packaging.
Faced with a declining domestic market BAT has concentrated on its four premium “global brands” – Kent, Pall Mall, Lucky Strike and Dunhill – and expanded overseas.
This meant that 60 per cent of profit and 75 per cent of volume came from emerging markets.
In mature western Europe markets it managed to increase profits by 10 per cent, a result of cutting costs and raising prices.
“The economic climate around the world is far from settled but we remain confident that our strategy should continue to generate growth for our shareholders in the years ahead,” chairman Richard Burrows said yesterday.
He also praised “the roll-out of product and packaging innovations” designed to add a premium to the 705bn cigarettes BAT sold in 2011.
Shares in the firm remained flat at 3,133p.