BAT Kenya Registers 1.9% Rise in Gross Revenues in 1H18

British American Tobacco Kenya has announced its 1H18 results with EPS coming in at 20.14 shillings, a 3.4 percent increase on a year-to-year basis.

Gross revenues rose by 1.9 percent on a year-to-year basis to 17.5 billion shillings on the back of growth in export volumes and higher revenues due to higher prices and expansion in distribution to new markets. This was despite lower volume in domestic markets.

However, there was a sharp uptick in operating costs that impacted the operating margin to record negative growth (-2.0 percent on a year-to-date basis) to 30.9 percent. This was attributed to an 87 percent increase in excise tax stamps, lower product mix and higher inflation costs in the period.

Notably, finance costs reduced 21 percent on a year-to-year basis which was reflected in a higher PBT (+2.8 percent on a year-to-year basis to 2.9 billion shillings).

The Board of Directors has recommended an interim dividend of 3.50 shillings payable to shareholders in its books as at 20th August 2018.

The counter is currently trading at 600.00 shillings, and analysts from Genghis Capital recommend a HOLD, against their target price of 666.37 shillings per share, representing an 11.1 percent upside.

NSE Trading Expectations

As the week draws to a close, market analysts expect to see trades still on the mainly traded counters; Safaricom, Equity, KCB, and EABL. Safaricom is expected to test its current resistance of 30.00 shillings with demand pressure coming in at levels 29.50 shillings and above.

Analysts also anticipate a breach of the current resistance level for Equity, which is at 49.50 shillings to levels of 50.00 shillings though current demand might not support the price at that level.

“We could see the price come off to 49.00 shillings. KCB is expected to maintain its resistance at 47.50 shillings with low demand levels for the counter. EABL might find new support at 200 shillings from the previous support which was at 207 shillings.