BAT profit growth slows

25th Feb 2010 07:00

The world's second largest tobacco company, British American Tobacco (BAT), increased pre-tax profit by 11% in 2009, at the lower end of expectations, although revenue did better.Profit before tax of £4.08bn for the 12 months to 31 December was up from £3.68bn in 2008, but less than consensus estimates of £4.29bn. Profit had grown 16% at the half-way stage and by 20% in 2008.The maker of Dunhill and Lucky Strike cigarettes said revenue rose 17% to £14.21bn, or 10% at constant rates of exchange, on good pricing momentum and volume from acquisitions. There was a big £355m benefit from the translation of its results into sterling.Its four big brands achieved "good" overall volume growth of 4%, with Dunhill up 9%, Lucky Strike 4% and Pall Mall 10%, although Kent volumes dropped 4%.As expected, net debt reduced to £8.8bn from £9.9bn at the end of 2008, but a 16% increase in the final dividend to 71.6p a share only took the full-year payout to 99.5p, less than the 101p expected.Chairman Richard Burrows called it a "remarkable" year to join British American Tobacco, cheering the firm's "fine figures" and "well established strategy for achieving sustainable growth"."Our unrivalled geographic spread mitigates risk for shareholders and will help us maintain sustainable growth and build shareholder value," said the former governor of the Bank of Ireland.