BAT Zimbabwe FY 2012 results

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BAT Zimbabwe FY 2012 results

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BAT Zimbabwe FY 2012 results

  1. 1. VP13171 Chairman’s Statement Introduction It is with great pleasure that I present to you our financial results for the year which ended 31 December 2012. Our economy continued to show positive signs of steady growth throughout the year and this provided a conducive platform for a continued focus on improving growth and profitability. However, there are still viability challenges within the business community as a whole, partly attributable to lower levels of foreign direct investment, liquidity challenges and an uncertain investment climate. In light of the positive changes brought about by improving economic circumstances, the year saw the business performing exceedingly well as evident in the financial report. The business continues to take full advantage of: prominent brands, strong distribution network, high quality products;and good customer relations,to maintain our industry leadership position. .Sound management principles and an effective operational approach, as well as the hard work and continuous innovations made by our employees, enables our company to achieve consistent and impressive growth. The Group expects to continue to achieve an improvement to its results in the future after successful compliance with the Indigenisation and Economic Empowerment Regulations. Financial results British American Tobacco Zimbabwe (Holdings) Limited continues to lead the cigarette industry despite a decrease in sales volumes by 11% from the previous year. The decrease in sales volumes was experienced across all our local brands and largely attributed to the increase in excise duty and retail selling price of cigarettes at the end of 2011. The slow down in GDP growth is also a contributory factor. However, Dunhill achieved outstanding volume growth of 43% as compared to the previous year since it is not a mass market brand. Export sales of cut rag volumes to Mozambique decreased against same period last year by 16% after their leaf procurement process was revised and new sources identified. The Group’s operating revenue recorded significant growth, reaching USD 51.8 million, up 30% over the same period last year, which was converted into a profit attributable to shareholders of USD 12.3 million, a 151% improvement on the 2011 results. The Group continues to place emphasis on promoting sales growth across the product portfolio whilst also ensuring that demand for all products is met at all times on a National basis. Our trade marketing and distribution activities have been successful in ensuring we achieve the much needed sales growth and share of market. Madison continues to be our major drive brand contributing 68% of our national sales volume. Strategy Our Strategic Leadership Agenda, with its seven key focus areas, has become integral in driving future growth for the business. The strategy is aimed at strengthening all aspects of the business and continuing our efforts to retain our leadership position in the cigarette manufacturing industry. We are committed to achieving both near term profitability and long term sustainable growth in line with this strategy. Dividend The Company is committed to holding in the highest regard the interests of its shareholders and the returns achieved for them. In view of the Company’s favourable operating results for 2012 and considering our dividend policy, the board is declaring a dividend of USD 0.42 per share for the period ending 31 December 2012. Conclusion The business shall continue to achieve positive performance levels through the joint efforts of our numerous stakeholders It is therefore appropriate to end this review by thanking all those who continue to contribute positively to the Group’s performance, the Group management and employees for their commitment and resilience, my fellow Directors for their contribution, guidance and counsel and all other business partners and stakeholders at large. Kennedy Mandevhani Chairman ZIMBABWE FOR THE YEAR ENDED 31 DECEMBER 2012 Audited Financial Results STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2 012 2 011   US$ 000 US$ 000   Revenue 51 853 39 784 Cost of sales (21 962) (21 416) Gross profit 29 891 18 368 Selling and marketing costs (3 860) (3 019) Administrative expenses (9 173) (8 836) Other income 1 094 964 Other (losses)/ gains - net (340) (133) Operating profit 17 611 7 344 Finance income 6 2 Finance cost (740) (409) Profit before income tax 16 878 6 937 Income tax expense (4 616) (2 054) Profit for the year 12 262 4 883 Other comprehensive income - - Total comprehensive income for the year 12 262 4 883 Attributable to: Owners of the parent 12 262 4 883 Non-controlling interests - - Total comprehensive income for the year 12 262 4 883 Basic earnings per share ($) 0.71 0.28 Diluted earnings per share ($) 0.68 0.28 Headline earnings per share ($) 0.69 0.28 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012 2011 US$ 000 US$ 000 ASSETS Non-current assets Property, plant and equipment 9 834 9 582 Intangible assets 222 312 Investment property 225 231 Financial assets in at fair value through profit or loss 27 44 10 308 10 169 Current assets Inventories 12 466 14 611 Trade and other receivables 7 337 4 851 Cash and cash equivalents 3 514 2 243 23 317 21 705 Total assets 33 625 31 874 EQUITY AND LIABILITIES Equity attributable to the owners of the parent Share capital 5 214 5 214 Non-distributable reserve 337 337 Retained earnings 8 411 2 928 Total equity 13 962 8 479 Non-current liabilities Deferred income tax liabilities 2 033 2 130 Current liabilities Trade and other payables 8 900 14 134 Provisions for other liabilities and charges 1 415 957 Current income tax liability 1 465 325 Borrowings 5 850 5 850 17 630 21 266 Total liabilities 19 663 23 396 Total equity and liabilities 33 625 31 875 COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012 2011 US$ 000 US$ 000 ASSETS Non-current assets Property, plant and equipment 9 834 9 582 Investment in subsidiaries - - Intangible assets 222 312 Investment property 225 231 Financial assets in at fair value through profit or loss 27 44 10 308 10 169 Current assets Inventories 12 466 14 611 Trade and other receivables 7 337 4 851 Cash and cash equivalents 3 514 2 243 23 317 21 705 Total assets 33 625 31 874 EQUITY AND LIABILITIES Equity attributable to the owners of the parent Share capital 5 214 5 214 Non-distributable reserve 337 337 Retained earnings 8 411 2 928 Total equity 13 962 8 479 Non-current liabilities Deferred income tax liabilities 2 033 2 130 Current liabilities Trade and other payables 8 900 14 134 Provisions for other liabilities and charges 1 415 957 Current income tax liability 1 465 325 Borrowings 5 850 5 850 17 630 21 266 Total liabilities 19 663 23 396 Total equity and liabilities 33 625 31 875 STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2012 2011 US$ 000 US$ 000 Cash flows from operating activities Cash generated from operations 12 954 7 324 Interest paid (740) (409) Income tax paid (3 410) (1 838) Net cash generated from operating activities 8 804 5 077 Cash flows from investing activities Purchases of property, plant and equipment (1 230) (2 235) Proceeds from sale of property, plant and equipment 470 133 Interest received 6 2 Net cash used in inventing activities (754) (2 100) Cash flows from financing activities Proceeds from borrowings - 1 350 Repayment of borrowings - (1 398) Dividends paid to the Company’s shareholders (6 779) (1 756) Net cash used in financing activities (6779) (1 806) Net increase in cash and cash equivalents 1 271 1 172 Cash and equivalents at beginning of the year 2 243 1 071 Cash and cash equivalents at end of the year 3 514 2 243 STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share Share Other Retained capital premium reserves earnings Total US$000 US$000 US$000 US$000 US$000 Balance at 1 January 2011 - - 5 551 (199) 5 352 Transfer on redenomination of share capital 5 214 - (5 214) - - Profit for the year - - - 4 883 4 883 Dividends to equity holders of the Company - - - (1 756) (1 756) Balance at 31 December 2011 5 214 - 337 2 928 8 479 Balance at 1 January 2012 5 214 - 337 2 928 8 479 Profit for the year - - - 12 262 12 262 Dividends to equity holders of the Company - - - (6 779) (6 779) Balance at 31 December 2012 5 214 - 337 8 411 13 962 FINANCIAL HIGHLIGHTS Group summary (US$ 000’s) YEAR ENDED 31 DECEMBER 2012 2011 Net turnover 51 853 39 784 Operating profit 17 611 7 344 Profit before income tax 16 878 6 937 Profit attributable to shareholders 12 262 4 883 Total assets 33 625 31 874 Basic earnings per share 0.71 0.28 Diluted earnings per share 0.68 0.28 Headline earnings per share 0.69 0.28 Directors: Kennedy Mandevhani* (Chairman), Lovemore T. Manatsa (Managing Director), Richard Morgan (Finance Director), Jorge Davyt*, Angela Mashanyare*. (Non-Executive*)

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