BAT Kenya #ticker:BAT will pay its shareholders a dividend of Sh53.50 per share or a total of Sh5.3 billion for the year ended December, the highest payout in the history of the cigarette maker.
The company recorded an 18 percent rise in net profit to Sh6.5 billion during the period, helping it to raise dividend per share by a similar margin from the Sh45 it paid for the year before.
The dividend consists of an interim Sh3.50 per share that was paid for the six months ended June 2021, and a final dividend of Sh50 which will be paid on May 24 to shareholders who will be on the April 22 register.
“The easing of Covid-19 restrictions during the year created a more favourable trading environment compared to the prior year. This coupled with continued investments behind our brands, support to our trade partners, and excellence in execution by our people resulted in the stability of our domestic sales,” said BAT Kenya.
Net revenue jumped marginally to Sh25.4 billion as increased taxation ate into gross sales.
“The growth in gross revenue was offset by a Sh1.1 billion (eight percent) increase in excise duty and value added tax, following inflationary increases in excise duty rates and VAT rate changes,” the company said.
“Consequently, net revenue increased marginally by 0.4 percent to Sh25.4 billion.”
Lower costs and a Sh1.2 billion gain from property valuation lifted the firm’s profitability, more than compensating for the flat sales.
BAT’s 2021 dividend represents a yield of 11.4 percent, based on Thursday’s closing price of Sh468 per share, the third highest at the bourse after Carbacid (14.8 percent) and the NSE (12.97 percent).
The yield is also higher than the prevailing rate of 9.7 percent on the government’s one-year Treasury bill.
BAT has 100 million issued shares and exercises a policy of distributing the bulk of its net earnings (82.5 percent) to shareholders in form of dividends, partly due to the fact that it is a mature company with limited capital expenditure.
The firm had until 2017 maintained a policy of paying out its entire net profits as dividends to shareholders. BAT says it is keen on reintroducing tobacco-free oral nicotine products as alternatives to smoking after facing regulatory hurdles.