The Lemon Fool

Results communications in 2018 will include presentation of results against 2017, as though the Group had owned the acquisitions made in 2017 for the whole of that year. Comparison of results on this basis will be termed "on a representative basis" and will provide shareholders with a results comparison representative of the Group having owned the acquisitions throughout 2017 and 2018. For these comparison purposes, the Group has previously issued the 2017 results on such a basis for both the six months ended 30 June 2017 and full year ended 31 December 2017.


Trading update - ahead of closed period commencing 26 June 2018

· The business continues to perform well and trading is in line with our expectations

· Strong adjusted revenue growth from the Strategic Brand Portfolio, on a representative basis

· Continued strong market share growth, driven by the Global Drive Brands (GDBs)

· Adjusted revenue and adjusted profit growth, on a representative basis, expected to be weighted to the second half of the year, as the impact of a number of significant events affecting the comparison with H1 2017 unwind

· Good adjusted constant currency EPS growth, is expected to be impacted by a significant currency translation headwind of around 9% for the first half and 6% for the full year, assuming exchange rates remain unchanged for the remainder of the year

Dod101 wrote:Thanks Ian. I translate that as meaning don't get too excited about our half year results.

Dod

Dod101 wrote:I am just a bit concerned because I do not understand why the market would place a higher rating on BAT than Imperial, except that it feels a 'risk premium' for want of a better expression, is warranted for Imperial.

Dod

We expect our market share to continue to grow strongly, driven by the GDBs(*)

Ian,

I understand your desire to minimise company specific risks by not over weighting a particular share but comparing BATS 5.2% to IMB 6.7% I think that 25%ish extra yield, would be very difficult to overlook and I'd chance it with imb. I too have both in my HYP, I have added over the years so I assume the yields of each have moved around with both vying for first place. I'm relaxed about weightings within the sectors so am happy to let either overweight in pursuit of income, in fact I see I currently have more imb than bats.

Dod101 wrote:Yes probably that and Imperial have announced some I think so far unspecified sales whereas BAT seem pretty clear on their strategy. OTOH, Imperial confirm a continuing 10% increase in their dividend and for us that is very attractive. Probably nothing to worry about with either, at least in the relatively short term.

Dod

idpickering wrote:It's income that we're about here, so I might just do a bit of Pickering, and go for IMB instead? I might even top up my BATS holdings this month and IMB next month, in order to qualify for each shares ex divi dates, 28/06/18 and 24/08/18 respectively. Ian.

I am more concerned about other details in the release which again cast doubt over British American Tobacco’s long-term profits outlook, though...............................I’m worried by the rate at which total cigarette consumption is dropping. The firm itself estimates that global cigarette volumes will fall 3.5% in 2017.

kempiejon wrote:

idpickering wrote:It's income that we're about here, so I might just do a bit of Pickering, and go for IMB instead? I might even top up my BATS holdings this month and IMB next month, in order to qualify for each shares ex divi dates, 28/06/18 and 24/08/18 respectively. Ian.

As is your prerogative Ian and I doubt I'm the only one not surprised, I hope I helped your process rather than confusing the matter more. As I said, for me the higher yield is the only option if safety and reliability of the dividend is satisfied. I've a well diversified portfolio with plenty of shares adding new money each month so I usually look for the best income I can find. I'm probably not shortlisting tobaccos for my next buys but 6.7% yield and double digit growth looks pretty keen to me and more tobacco wouldn't break any of my concentration guidelines.

richfool wrote:There is a Motley fool view on BATS here:
https://www.fool.co.uk/investing/2018/0 ... lue-traps/

Amongst the parts that drew my attention was this:

I am more concerned about other details in the release which again cast doubt over British American Tobacco’s long-term profits outlook, though...............................I’m worried by the rate at which total cigarette consumption is dropping. The firm itself estimates that global cigarette volumes will fall 3.5% in 2017.

Dod101 wrote:I suspect that the real answer to the fall in the share prices for the tobacco companies are in that item. The institutional investors (they make the market) have lost confidence in the long term viability of tobacco and in the main they are looking for growth or at least total return. We small investors are not going to have much impact and so the share price falls away. However if we are prepared to tolerate that, they should be good income shares for a long time to come.

Dod

Dod101 wrote:I suspect that the real answer to the fall in the share prices for the tobacco companies are in that item. The institutional investors (they make the market) have lost confidence in the long term viability of tobacco and in the main they are looking for growth or at least total return. We small investors are not going to have much impact and so the share price falls away. However if we are prepared to tolerate that, they should be good income shares for a long time to come.

Dod

Bouleversee wrote:Did I dream it or aren't IMB into something totally unconnected with smoking/vaping/heat not burn at all? Could look it up but no time and I expect someone will already know if I'm right.