British American Tobacco Uganda posted a strong jump in 2019 profit as its rebranded cigarettes drove an increase in sales, according to financials released on Monday.
BATU reported net profit of Shs15.6 billion, or Shs320 per share, up from the Shs13.7 billion, or Shs280 per share, that the company reported in 2018. That means net income rose at a faster rate — 14.1% — than in the previous year, reversing the slower growth registered for 2018.
The company’s gross revenue rose 6.6% year on year to Shs164.2bn, faster than the previous year’s growth of 2.9%. BATU said the increase in gross revenue was “driven by benefits of a revamped portfolio and distribution efficiencies.”
According to its annual report for 2018, the cigarette importer and distributor started a rebranding of its cigarette products in 2018. The first step of that revamp “was the migration of Safari to Pall Mall, representing a ‘perfect collaboration’ between a strong local brand – Safari, and BAT’s biggest global selling value for money brand – Pall Mall,” the report said. The company says the introduction of Pall Mall drove sales in 2019.
Operating costs increased by 6.3% to Shs52.9bn, much faster than 2018’s growth of 1% or the 6.4% reduction reported in 2017. The rise was due to “inflationary increases and portfolio transformation expenses,” according to a statement released by the company.
Operating income was up 12.5% in 2019 to Shs22.4bn.
BATU said it will pay a dividend of Shs320 per ordinary share, subject to approval by shareholders at its annual general meeting scheduled for 21 May 2020.
“The dividend, which is subject to withholding tax, will be paid on 19 June 2020 to the shareholders on the register at the close of business on 29 May 2020,” the statement said.
BATU is a single product company that imports and distributes cigarettes. It trades on the Uganda Securities Exchange, and its majority shareholder with a 90% stake is British American Tobacco plc, which is headquartered in London.
British American Tobacco plc stakes in BAT Uganda are held through a London-based subsidiary, British American Tobacco Investments Ltd, which owns a 70% shareholding in the company, and Precis (1790) B.V., registered in the Netherlands, with a 20% stake.
The Pictet Group, the Swiss wealth and asset manager, owns an 8.69% stake in the company. Other shareholders, with stakes below 1% each, include UAP Provincial Insurance Company Limited, The Registered Trustees of Chandaria Foundation, and Goldstar Insurance Company Limited.