British American Tobacco (BATS)
Posted: February 28th, 2019, 7:20 am
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monabri wrote:https://www.japantimes.co.jp/news/2019/03/02/national/japan-tobacco-british-american-philip-morris-lose-appeal-13-billion-quebec-lawsuits/#.XHr6fOzLedl
Subsidiaries of Japan Tobacco Inc., British American Tobacco PLC and Philip Morris International Inc. were ordered to pay damages of more than 17 billion Canadian dollars ($12.8 billion) after losing an appeal of class-action lawsuits filed by smokers in Quebec.
A British American Tobacco spokesperson said:
"We are extremely disappointed that the Quebec Court of Appeal did not overturn the trial court's judgment against our Canadian subsidiary, Imperial Tobacco Canada Ltd. We are still of the view that this decision is wrong - ignoring the reality that both adult consumers and government have known about the risk associated with smoking for decades. As a result, we believe it should be overturned.
"Imperial Tobacco Canada Ltd. needs to review the court's decision in more detail and will decide on next steps over the coming days and weeks. Given the significance of the judgment, they have said that they fully intend to appeal the decision to the Supreme Court of Canada."
Following the release of the judgment from the Quebec Court of Appeal, the plaintiffs requested immediate release of the funds on deposit, which was refused. They then filed a formal motion to release the funds. Imperial Tobacco Canada Ltd. filed a motion to prevent the release of the funds in question.
On 1 March 2019, the judgment in the two Quebec Class Action lawsuits against our subsidiary, Imperial Tobacco Canada Ltd. (ITCAN), and two other Canadian tobacco companies was publicly issued by the Quebec Court of Appeal in Montreal. The Court of Appeal has upheld the trial court's decision of May 2015, including the previously stated requirements for the defendants to deposit approximately CAD1.1 billion into a court escrow account.
As part of the 2015 decision, ITCAN was required to place CAD758 million (approximately £436 million) in escrow - the final payment of which was made in 2017. This deposit was held as an asset on the Group's balance sheet at the year-end (31 December 2018).
Following the 1 March 2019 judgment, the Board of Directors of ITCAN have reassessed the recoverability of the deposit and have determined that the asset's recoverability is, under IFRS, less than virtually certain. Consequently, a provision of approximately £436 million will be charged to the Group's consolidated income statement in 2019. This will be treated as an adjusting expense.
There will be no impact from this charge to the ratio of adjusted net debt to adjusted EBITDA, with this decision having no impact to cash flow in 2019.
The Board of Directors of ITCAN and the Group are monitoring developments. As previously stated, ITCAN intends to seek leave to appeal this judgment to the Supreme Court of Canada.
British American Tobacco p.l.c. was not a party to the proceeding and is not a party to the judgment.
quick look at British American Tobacco (LSE: BATS) would suggest a stock that’s being criminally undervalued by the market.
It may not be fashionable to say so but the addictive nature of its products has made this FTSE 100 stalwart a long favourite for those seeking great profits growth. And broker forecasts would suggest nothing has changed in this regard, with bottom-line advances of 5% and 7% forecast for 2019 and 2020, respectively.
Yet despite the appearance that it’s ‘business as usual’, British American Tobacco changes hands on a bargain-basement forward P/E ratio of just 9.7 times, giving value-chasing investors reason to celebrate for a figure that’s also long, long below the firm’s historical multiples.
7% dividend yields looking safe
There’s plenty for income investors to cheer as well. Underlining expectations that profits will continue their traditional ascent, number crunchers are predicting 2018’s 203p per share dividend will creep to 209p this year before sprinting to 222.8p in 2019. Subsequent yields sit at a handsome 6.8% and 7.3%, respectively.
I believe there are good reasons for thinking British American Tobacco (LSE: BATS) offers excellent value for investors right now. So why do I think the FTSE 100 giant has the potential to deliver strong capital gains and a reliable flow of dividends?
Anti-tobacco firebrand
Investor sentiment turned sharply against tobacco stocks through 2018. The threat of regulation is never far from investors’ minds with this industry, but the year saw a run of particularly concerning news coming out of the US. Scott Gottlieb, head of the Food and Drug Administration (FDA) — and its most aggressive anti-tobacco firebrand in decades — ramped up the pressure on the industry:
In March, he announced he wanted to set a maximum limit on the amount of nicotine cigarettes can contain, which would force tobacco companies to re-engineer their products to make them less addictive.
In September, he identified what he called a vaping ‘epidemic’ among American teens, and said the FDA would crackdown on e-cigarettes.
In November, he said he would be moving to ban menthol cigarettes and flavoured cigars from the market, and severely restrict sales of flavoured e-cigarettes in stores and online.
All tobacco stocks suffered under this onslaught, but none more so than British American Tobacco, whose shares slumped more than 50% (from 5,018p to 2,500p) over the course of the year. BAT was particularly badly hit because analysts reckon menthol cigarettes account for about 60% of its US cigarette profits and 25% of the group’s total profits.
monabri wrote:
https://www.bloomberg.com/amp/news/arti ... es-a-month
"Lawyers are considering legal action against British American Tobacco (BAT) on behalf of former employees given free cigarettes as part of their job."
Dod101 wrote:Thanks Ian. Looks all to be on target, and holders I imagine will just hang in there and hopefully see some continuing recovery of the share price.
Dod
monabri wrote:Dod101 wrote:Thanks Ian. Looks all to be on target, and holders I imagine will just hang in there and hopefully see some continuing recovery of the share price.
Dod
I guess you meant 'longterm'.......