More on BAT
BAT H1 Results
like-for-like operating profits (excluding exceptionals and changes in the group resulting from the merger of US businesses with R.J.Reynolds and the sale of Etinera) were 8% higher.
Excluding the effects of the merger and the disposal, there has been reasonably good underlying growth in sales volumes. Reduced net finance costs and a lower effective tax rate have helped adjusted diluted EPS of BAT increase by 23% to 41.65p.
The ongoing cost reduction programme together with the company’s organic volume growth potential in Africa, the Middle East and Asia Pacific are expected to raise BAT’s long-term growth prospects in the short-medium term.
The share (at 1,135p) is trading at a prospective PE of 13.9× (at the upper end of the sector) and offers an yield of 4%. its rating is in line with the other two tobacco companies (Gallaher and Imperial). This is despite Gallaher’s lower current growth. This can be clearly seen by looking at PEG ratios. Gallaher’s is considerably higher at 2.1 compared to BAT’s and Imperial’s . Gallaher’s higher rating reflects the differences we have discussed in previous pieces on that company.
Random picks: Barratt | GCap Media | Kelda | Pendragon | Reckitt Benckiser | Renishaw | Rotork | Spirax Sarco | Wolseley | Trinity Mirror