British American Tobacco nicotine inhaler wins regulatory approval: A new type of nicotine inhaler backed by British American Tobacco has won regulatory approval to go on general sale as a medicinal product, and could appear in shops as early as next year
28 Aug '14
Specially vulnerable: British American Tobacco has validated the thesis that an Executive given the title “head of special projects” has been transferred to the departures lounge. Superfluous Bosses are usually parked in this role with at least a pretence that the job may be permanent. However Jean-Marc Levy, who is stepping down unexpectedly as marketing Director, will occupy the post for just four months before leaving the tobacco giant. The special projects brief can be a useful airlock through which to bundle time-served Managers for two reasons. First, it makes the incumbent sound important. Second it bears no critical responsibilities. A special projects unit may be opened or closed at whim. You cannot do that with a division. The head of special projects may thus have the uncanny feeling that the red dot of a laser sight is trained on the back of his head. Nor are his projects likely to be truly special. The best innovations are likely to be generated within divisions, who will guard them jealously.
21 Aug '14
Press Comment on Imps.
Imperial Tobacco 5.6% dividend is attractive: Imperial Tobacco is a solid, defensive share that offers a 5.6% prospective dividend. Management said trading was on track to hit full year market expectations and, for investors looking for income, the stock remains a solid option. The FTSE 100-listed tobacco giant, which makes Davidoff and Gauloises Blondes, said it sold 91.7 billion cigarettes in the nine months ended June 30, a 1% fall. Revenues also dropped 1%, to £4.75 billion, in the period. In fact, the results for the nine-month period show a marked improvement at Imperial. The company was showing cigarette volumes down 3% and revenues down 5% at the half year stage. The company is spending £4.2 billion on buying U.S. cigarette brands Winston and Kool, as part of the $25 billion (£15 billion) merger between two of the world’s biggest tobacco groups – Reynolds American and Lorillard. Alison Cooper, one of the few female Chief Executives of a FTSE 100-listed company, reassured Imperial investors that a rights issue would not be needed to complete the deal, as debt financing had already been agreed. However, the group said it would suspend its share buy-back programme to speed up debt repayment. Imperial has been slowly moving into the growing e-cigarettes sector, and is due to launch its own version this year through its Fontem Ventures unit. It has been trailing its main U.K. rival, British American Tobacco (BAT), which launched its first e-cigarette last year. Over the long term, the tobacco industry is not expected to have a problem increasing prices to combat falling volumes. Imperial’s balance sheet is strong and the company remains an excellent place to park cash. Imperial Tobacco at 25.85+59p Questor Says “Hold”.
19 Aug '14
mperial Tobacco Group Plc (IMT.L) Announced, in its interim management statement for the nine months ended 30 June 2014, that the guidance for the full year continues to be modest adjusted earnings per share growth at constant currency with dividend growth of at least 10.0%. The Growth brands outperformed the market with volume growth of 3.0% and net revenue up 7.0%. The Specialist brands supported the total tobacco portfolio with net revenue gains of 3.0%.
1 Aug '14
Hold British American Tobacco for 4.4% dividend: British American Tobacco’s first half profits were hit by the strength of the pound but shareholders should stay focused on the long-term performance instead of being sidetracked by fluctuations in global currency markets. Europe’s largest tobacco group is focusing on its core global brands of Rothmans, Dunhill, Lucky Strike and Pall Mall and has been able to increase prices despite the subdued market backdrop. The cigarette group is using its strongest brands to expand in emerging markets, where cigarette volume was up by 5.7% during the first half. The company said it was taking market share in Asia-Pacific, Brazil and South Africa where sales of Dunhill were up 4.9%, and this offset declines of the Kent brand in Russia and Romania. The interim dividend was increased 6% to 47.5p and the shares go ex-dividend on August 20 with a payout on September 30. The prospective yield is 4.1%, rising to 4.4% next year. The pricing power that tobacco companies have is exceptional because people are addicted to their product and emerging economies are taking up some of the slack from Western markets where volumes are falling the fastest. These companies continue to be cash-generating machines that are ideal for income seekers, as long as they put the ethics of their investment to one side. Trading on a 2014 earnings multiple of 16.8 falling to 15.5, the rating remains hold. British American Tobacco at £35.23 -44p Questor Says ‘Hold’.
31 Jul '14
FT comment on BATS
it of the vapers: Strong sterling is the immediate challenge for British American Tobacco, whose interim operating profits slipped 12% to £2.46 billion. The long-term battle remains reputational, as regulation of cancer sticks intensifies. Demonstrating admirable chutzpah, Bats is seeking a product endorsement from a Department of Health agency. This prompts thoughts of old adverts urging Edwardians to smoke Dr Crippen’s Patent Asthma Mix For Healthier Lungs. But the multinational, helmed with sardonic brio by Nicandro Durante, wants a fillip for electronic cigs rather than the combustible sort. Confirmation that vaping is safer than smoking could encourage doctors to prescribe the devices, giving a small but useful fillip to sales. Big tobacco is probably more than a little afraid of the devices. The business that can patent an ecigarette as satisfying as a regular fag will have a category killer that could also hollow out mature cigarette markets. The old game of combating sales declines with marketing would be over for tobacco giants. For the moment it continues with BAT resisting U.K. government plans for plain packaging. A KPMG study found sales of smuggled packs that were branded but untaxed rose from 11.8 to 13.9% of the market in Australia after a similar reform. We may surmise a similar increase in the U.K. would reduce the tax take by £210 million yearly. However, tobacco-funded research has a poor record.
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