British American Tobacco (Zimbabwe) HY 2014 financial results

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British American Tobacco Ltd listed on the Zimbabwe Stock Exchange has released its Half Year Results. Check out
insights into this company in their presentation which appears below.
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British American Tobacco (Zimbabwe) HY 2014 financial results

  1. 1. Directors: Kennedy Mandevhani* (Chairman), Lovemore T Manatsa (Managing Director), Peter Doona (Finance Director), Andre Joubert*, Angela Mashanyare*, Hope C Sadza*, Wael Sabra* (Alternate Director), (*Non Executive) Share Share Other Retained Non-controlling Total capital premium reserves earnings interest US$000’s US$000’s US$000’s US$000’s US$000’s US$000’s Balance at 1 January 2013 5 214 - 337 8 411 - 13 962 Total comprehensive income for the period - - - (1 439) - (1 439) Other comprehensive income for the period - - - - - - Dividends - - - (6 867) - (6 867) Balance at 30 June 2013 5 214 - 337 105 - 5 656 Balance at 1 January 2014 5 214 - 337 5 317 - 10 868 Total comprehensive income for the period - - - 5 329 - 5 329 Other comprehensive income for the period - - - - - - Dividends - - - (3 154) - (3 154) Balance at 30 June 2014 5 214 - 337 7 492 - 13 043 Chairman’s Statement Unaudited Financial Results | For The Six Months Ended 30 June 2014 Introduction British American Tobacco Zimbabwe (Holdings) Limited has delivered a resilient performance in the first half of 2014. This is within the context of an increasingly challenging business and economic environment. Consumer expenditure has continued to decline as a result of limited economic growth. Likewise, business in general has been characterised by an increasing number of company closures and retrenchments. As such it is commendable that the Group has sustained sales volumes and profitable performance. Continued investment in our brands, distribution network, manufacturing capabilities and people means that the Group continues to create value for its shareholders and for Zimbabwe. Financial Results Cigarette sales volumes were in line with the same period last year. Our hallmark local brands (Madison and Everest) maintained sales volumes while our premium international brand offering, Dunhill, continued to grow with volumes increasing by 2 million sticks (65%). Total revenues were $20.3 million for the first six months of the year. The reduction of $2.8m compared with the same period last year mainly relates to the discontinuation of non-core cut rag sales in June 2013. Revenues from sales of manufactured cigarettes were broadly in line with the previous period. Gross profit reduced by $2.2 million to $13.8 million. This resulted from an increase in depreciation charges and refurbishment costs from upgrades to our manufacturing equipment, higher packaging costs due to growth in sales of our 10s-format brands, salary awards to employees and higher utilities charges. On a non-adjusted basis, operating profit increased by $4.6 million to $7.0m, primarily as a result of a reduction in expenses associated with our Employee Share Ownership Trust (“ESOT”). Results in the previous period were impacted by a material provision made for the value of awards made to employees. Operating profit for this period has also benefited from prudent management of marketing costs and administrative expenses. After the deduction of income tax expenses, net profit for the period is $5.3m compared to the 6 months ended 30 June 2013 with a loss of $1.4 million. Due to the timing of payments for tobacco leaf purchases, and the settlement of payables to related parties, cash generated from operations reduced to $5.0m (down from $15.4m against same period last year). Directorate There were no changes in the directorate during this period. Dividend The Group continues to hold the interests of our shareholders in the highest regard and the returns achieved for their investment in our business. As such, having regard to our Dividend Policy, and in view of the profit for the period, the Board is declaring an interim dividend of US$0.30 per share, which includes US$0.04 to be paid from historical retained earnings. Outlook Trading conditions are expected to remain challenging in the second half of the year as the country continues to look for economic development and growth. We will remain focused on the key pillars of our Strategic Leadership Agenda to further enhance our competitive advantage for the benefit of our shareholders. We will also continue to uphold the highest standards of business conduct. Conclusion The Group remains committed to performing to its full potential in a challenging environment, supported by a great team and a Winning Organisation. KENNEDY MANDEVHANI CHAIRMAN 23 July 2014 Dividend Declaration Notice Notice is hereby given that at a meeting held on Wednesday 23 July 2014, the Directors declared an interim dividend for the period ended 30 June 2014 of US$ 0.30 (Thirty cents per share). The dividend will be payable to shareholders registered in the books of the Company at the close of business on Friday 22 August 2014 (“Record Date”). The transfer books and register of members of the company will be closed from Friday 22 August 2014 to 25 August 2014, both dates inclusive. Dividend warrants will be posted on or about 22 September 2014. Non-resident shareholders tax and resident shareholder tax will be deducted from the gross dividends where applicable. The dividend timetable is as follows: Board Dividend Declaration: 23 July 2014 Announcement Date: 28 July 2014 Register Closes: 22 August 2014 to 25 August 2014 Record Date: 22 August 2014 Payment Date: 22 September 2014 By Order of the Board STEPHEN NYABADZA COMPANY SECRETARY 23 July 2014 Abridged Consolidated Statement Of Changes In Equity For The Six Months Ended 30 June 2014 Attributable To Owners Of The Parent Unaudited Audited 30 Jun. 2014 31 Dec. 2013 US$000’s US$000’s ASSETS Non-current assets Property, plant and equipment 8 475 9 110 Intangible assets 84 130 Investment property 216 219 Financial assets at fair value through profit or loss 15 15 8 790 9 474 Current assets Inventories 5 807 9 085 Trade and other receivables 8 188 4 690 Cash and cash equivalents 6 950 7 290 20 945 21 065 Total assets 29 735 30 539 EQUITY AND LIABILITIES Equity attributable to the owners of the parent Share capital 5 214 5 214 Non distributable reserve 337 337 Retained earnings 7 492 5 317 Total equity 13 043 10 868 Non-current liabilities Deferred income tax liablities 1 809 2 026 Current liabilities Trade and other payables 6 934 9 750 Provisions for other liabilities and charges 884 623 Share based payment liability 6 900 7 060 Current tax liability 166 212 14 883 17 645 Total liabilities 16 692 19 671 Total equity and liabilities 29 735 30 539 Abridged Consolidated Statement Of Financial Position As At 30 June 2014 (US$ 000’s) June June 2014 2013 Revenue 20 334 23 137 Operating profit 7 005 2 405 Profit before income tax 7 026 2 266 Profit/(loss) for the period 5 329 (1 439) Basic earnings per share (US$) 0.26 (0.09) Diluted earnings per share (US$) 0.26 (0.09) Financial Highlights For The Six Months Ended 30 June 2014 Unaudited Unaudited 30 Jun. 2014 30 Jun. 2013 US$000's US$000's Revenue 20 334 23 137 Cost of sales (6 529) (7 168) Gross profit 13 804 15 969 Selling and marketing costs (1 715) (2 166) Administrative expenses (4 365) (4 485) Share based payment expense (271) (10 606) Other income 240 3 694 Other expenses (688) (1) Operating profit 7 005 2 405 Analysed as: - Adjusted operating profit 7 005 9 313 - Indigenous Employee Share Ownership Trust expenses - (10 173) - Write back of related party payables - 3 265 7 005 2 405 Net finance income/(costs) 22 (139) Finance cost - (139) Finance income 22 - Profit before income tax 7 026 2 266 Income tax expense (1 698) (3 705) Profit/(loss) for the period 5 329 (1 439) Other comprehensive income - - Total comprehensive income/(loss) for the period 5 329 (1 439) Attributable to: Owners of the parent 5 329 (1 439) Non-controlling interests - - Total comprehensive income/(loss) for the period 5 329 (1 439) Basic earnings per share ($) 0.26 (0.09) Diluted earnings per share ($) 0.26 (0.09) Headline earnings per share ($) 0.26 (0.09) Abridged Consolidated Statement Of Comprehensive Income For The Six Months Ended 30 June 2014 Unaudited Unaudited 30 Jun. 2014 30 Jun. 2013 US$000’s US$000’s Cash flows from operating activities Cash generated from operations 4 957 15 366 Interest paid - (139) Income tax paid (1 962) (3 621) Net cash generated from operating activities 2 995 11 605 Cash flows from investing activities Purchase of property, plant and equipment (203) (288) Proceeds on disposal of property, plant and equipment - 9 Interest received 22 - Net cash used in investing activities (181) (279) Cash flows from financing activities Repayments of borrowings - (2 850) Dividends paid to owners of the parent (3 154) (6 867) Dividends paid to non-controlling interests - - Net cash used in financing activities (3 154) (9 717) Net (decrease)/increase in cash and cash equivalents (340) 1 609 Cash and cash equivalents at the beginning of the period 7 290 3 514 Cash and cash equivalents at end of the period 6 950 5 123 Abridged Consolidated Statement Of Cash Flows For The Half Year Ended 30 June 2014 Notes To The Financial Statements For The Half Year Ended 30 June 2014 1. General information British American Tobacco Zimbabwe (Holdings) Limited the (“Group”) manufactures, distributes and markets cigarettes to a network of independent distributors, wholesalers and retailers. The Group has a cigarette manufacturing plant in Zimbabwe and sells cigarettes solely for the Zimbabwe market. 2. Accounting Policies and reporting currency There has been no change in the Group’s accounting poliicies since the date of the last audited financial statements. These financial statements are presented in United States Dollars (US$), being the currency of the primary economic environment in which the Group operates. 3. Basis of preparation The Group’s Interim financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and are based on statutory records that are maintained under the historical cost convention. Supplementary Information 30 June 2014 30 June 2013 US$000’s US$000’s 4. Depreciation charge 890 535 5 Capital expenditure 203 288

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