Shareholders of British American Tobacco (BAT) Uganda are set to earn a total of shs36.8billion as dividends accruing from the company’s exceptional financial performance in the year ended 31 December2014.
For the year ended 31 December 2013, the company paid shs6.9billion to its 1,304shareholders.
Following the remarkable performance, the board of directors has recommended a final dividend of shs748 per share for the just concluded year compared to shs141 per share paid last year.
In his remarks at the company’s 15th Annual General Meeting held at Sheraton Kampala today, Mr Dadson Mwaura, the Managing Director BAT Uganda said, the company will pay the dividend in line with its policy of 100% dividend pay-out, subject to withholding tax, on or before June 15th 2015 to shareholders on the register as at the close of business on 28th May 2015.
The dividend payment comes on the back of a stronger financial performance by the company in 2014.
During the year, the business registered a profit after tax of shs36.8 billion that is 240% higher than the shs10.8billion recorded in 2013.
It also recorded an overall growth in net revenue of 27% from shs213 billion in 2013 to shs270 billion in 2014. The growth is attributed to an increase in both leaf and cigarette volume sales.
In his remarks after the meeting, Mr Fred Tumwesigye, a Non-Executive Director on the BAT Board who chaired the AGM on behalf of BATU Board Chairman Hon Dr Elly Karuhanga, observed that BATU’s performance was affected by the full year impact in 2014 of the 40% increase in excise tax on cigarettes that took effect on 1st July 2013, offset by the profits from the sale of its Kampala Green Leaf Threshing Plant site.
The industry also faced a growing incidence of illicit trade and further depreciation of the Uganda shilling, beside the threat of increasingly stringent regulatory regimes. “Despite difficult economic factors, the business has registered a strong performance and continues to deliver sustainable business growth.”
In August 2014, BATU closed its leaf operations in Uganda eliminating a significant source of considerable volatility, risk and overhead cost to the business. “We will now focus on the cigarette business through improving our distribution capabilities, building brand equity, growing value and market share. This approach will deliver a more sustainable return to our shareholders” Mr Fred Tumwesigye explained.
Commenting on the proposed legislation for the industry including the Tobacco Control Bill 2014, Mr Mwaura underpinned the company’s support for regulation of the industry.
However, he said, regulation should be reasonable, balanced, evidence-based and enforceable.
“We together with the rest of the tobacco industry stakeholders would like to see effective regulation that meets public health objectives, respects our legal rights, does not impede our ability to compete and does not damage livelihoods, such as those of farmers, traders and those employed in the sector. We are transparent about what we think and will continue to engage for fair and balanced regulation,” he added.
Mr Mwaura, 42, succeeded Mr. Jonathan D’Souza, 47, as the company’s Managing Director in December last year and was appointed to the Board of BAT as an Executive Director and Managing Director of the company on Jan 1, 2015.
Mwaura joined the BAT Group in 1997, taking on his first assignment with BAT Kenya, and has held several roles in Marketing, Strategic Planning and Consumer Insights in Kenya, UK, Hungary and Turkey. Prior to joining the Board, he was Head of Trade Marketing and Distribution in BAT Kenya.
Mwaura brings along extensive experience in different areas of Marketing and people leadership. He holds an MBA degree in Marketing and International Business from the University of Nairobi.
BAT Uganda shares remain one of the well-priced on the USE at the moment, trading at an average of Shs 8,525 per share. The shares have consistently remained competitive on the stock exchange.