BAT To Give Ksh 50 Per Share As Dividends

BAT Kenya released its FY21 results reporting a 17.5 percent y-o-y increase in PAT to 6.5 billion shillings largely on account of lower operating costs which declined by 9.5% y-o-y to 16.1 billion shillings.

The company attributed this performance to its cost management initiatives supporting bottom-line numbers in spite of reversion of VAT and income tax rates during the financial year.

EPS for the period stands at 64.83 shillings per share. The board of directors has proposed a final dividend of 50.00 shillings per share to be paid on 24th May 2022 to shareholders on the register at the close of 22nd April 2022; bringing the total dividend per share for the year to 53.50 shillings.

Net revenue edged up a marginal 0.4 percent y-o-y to 25.4 billion shillings. This was against a 3.1 percent y-o-y rise in gross revenue to 40.0 billion shillings that was supported by a 1.0 percent y-o-y increase in domestic sales (vis a vis a 24.0 percent y-o-y decline in domestic sales in FY20) reflecting the rebounding of economic activity in FY21.

Excise duty and VAT increased 8.3 percent y-o-y as the fiscal year saw a reversion back to 16.0% VAT from 14.0 percent and 30.0 percent income tax rate from 25.0 percent. Excise and VAT as a percentage of gross revenue, in turn, increased 174 bps y-o-y to stand at 36.5 percent.

Cost of operations declined by 9.5 percent y-o-y to 16.1 billion shillings attributable to the impact of the company’s cost management initiatives as highlighted by management during the release of the results. As a result, the operating profit margin improved by 690 bps y-o-y to 36.9 percent.

Total assets grew 11.1 percent y-o-y (+24.7 percent h-o-h) to KES 24.1 BN on the back of a 12.7 percent y-o-y increase in non-current assets to KES 12.3 BN and a 9.5% y-o-y increase in current assets to 11.8 billion shillings.

Total liabilities on the other hand dropped by 7.2 percent y-o-y to KES 9.1 BN (+3.7 percent h-o-h) as a result of a 12.9 percent y-o-y decrease in current liabilities to 7.2 billion shillings. Non-current liabilities increased by 23.0 percent y-o-y to 1.9 billion shillings. Total shareholders’ equity edged up 26.3 percent y-o-y to 15.0 billion shillings.

On a trailing basis, BATK is trading at a P/E multiple of 7.2x against a sector median of 6.7x and a P/B multiple of 3.1x against a sector median of 0.8x. Its ROE stands at 43.3 percent, against a sector median of 7.8 percent whereas ROA stands at 26.9 percent, against a sector median of 4.5 percent.