Harare – Cigarette manufacturer, British American Tobacco (BAT)’s revenue increased by 16 percent to US$42.7 million for the year ended 31 December 2018, from US$36.8 million recorded in 2017 driven by a strong sales performance and an improvement in the sales mix.
Gross profit consequently increased by 18 percent to US$31.4 compared to US$26.7 in the prior year, abetted by continued increased efficiencies in the Company’s manufacturing activities.
“The Company’s total sales volumes for the year under review increased by 16% compared to 2017 financial year,” the Company’s Chairman Lovemore Manatsa said in a statement accompanying the financial results.
“The Company’s Low Value for Money Brand, Ascot, grew by 171% driven by robust trade activations, with the Value for Money Segment (Madison and Everest) recording a 10% growth driven by Everest which grew by 35%.”
Selling and marketing costs were at US$5 million, an increase of 3 percent compared to US$4.9 million in the same period last year.
Manatsa said this increase came in line with continued support of main brand activities to drive the Company’s volumes upwards.
“Administrative expenses were US$0.4 million (5%) lower than the previous year, driven savings initiatives coupled with the benefits of restructuring activities implemented in previous years which offset the impact of an increase in inflation in the last quarter of the year,” said Manatsa.
Operating profit grew by 36 percent to close at US$22.6 million compared to US$6.0 million while earnings per share increased to US$0.72 up from US$0.51 in 2017.
Cash generated from operations increased by 22 percent from US$14 million generated in 2017 to US$17.1 million.
“This was due to an increase in profit offset by higher inventories and debtors,” said Manatsa.
On the outlook, Manatsa said that the Company remains confident that its strategies remain appropriate and that its brand portfolio is consumer relevant.
“Further, the quality of our people and processes will help us to deliver a sustainable competitive advantage required for the future success of the Company in delivering consistent value to our shareholders,” said Manatsa.
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