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[2008-05-08] No Bonus Shares Yet for BAT Investors Shareholders of British American Tobacco (BAT) will have to wait longer to know whether they will get bonus shares.
The decision is tied to the resolution of excise tax issues and the impeding implementation of the Tobacco Control Act in July.
Speaking during the company's annual general meeting, chairman Evanson Mwaniki said how the two issues are handled will impact on the company's share value.
"The board considered the request by shareholders for bonus shares but decided the right time is after the two critical issues are resolved." Mr Mwaniki said.
The chairman said that excise duties increased substantially in 2007, averaging over 20 percent across their product portfolio.
The impact of some aspects of the Tobacco Control Act are also not clear to the management.
"We are discussing with the government and hope that a solution will be found." he said.
The management said the challenge of counterfeit cigarettes remained, with between 8 percent to 12 percent of the cigarettes in the market being in this category.
Mr Maistre said although cigarette prices had remained stable, future price increases could be determined on how the issue of excise duties is resolved.
"We are not ruling out out potential increase in cigarette prices depending on how the issue of excise duties is resolved."
Despite these challenges, the company posted a pre-tax profit of Sh2.1 billion, which is 17 percent increase compared to 2006.
Gross turn-over increased by 23 per cent to Sh 15.8 billion compared to Sh12.7 billion in 2006.
The growth was attributed to higher sales volumes, pricing initiatives in domestic market, cost management and supply chain savings.
The directors recommeded a final dividend of Sh10.50 per Sh10 ordinary share. When added to the interim dividend this brings the amount to Sh17 for the year 2007.
