British American Tobacco Half Year Report to 30 Jun 20.

[idpickering]

Jack Bowles, Chief Executive said:

" The business is performing well in difficult circumstances as our continued focus on our three key priorities2 has enabled us to rapidly adapt to the current environment.

1. We are building A Better Tomorrow

o 10% of our revenues come from non-combustible categories

o We are making good progress towards our target of 50 million non-combustibles consumers by 2030

o Invested an additional £250 million in New Categories marketing

2. We are continuing to deliver adjusted revenue, profit from operations and earnings growth at constant rates

o Strong cigarette price/mix (8.5%) reflects the strength of our differentiated brand portfolio

o Which offsets lower cigarette and THP volume (down 6.3%)

o And the impact of COVID-19 of approximately -4% on adjusted revenue in the first six-months of 2020

3. Multi-category consumer acquisition drives share growth

o Our Non-Combustibles consumer base increased to 11.6 million (up 1.1 million from December 2019), being an increase of 2.7 million consumers on a rolling 12 month basis from June 2019

o New categories revenue grew 12.7% (at constant rates)

o We are growing volume share in THP and value share in Vapour, with Modern oral adjusted revenue up 71% (at constant rates)

And later;

DIVIDENDS

Declaration

On 27 February 2020, the Company announced that the Board had declared an interim dividend of 210.4p per ordinary share of 25p, payable in four equal quarterly instalments of 52.6p per ordinary share in May 2020, August 2020, November 2020 and February 2021.

The May 2020 dividend was paid to shareholders on the UK main register and South Africa branch register on 13 May 2020 and to holders of American Depositary Shares (ADSs) on 18 May 2020. The three remaining quarterly dividends will be paid to shareholders registered on either the UK main register or the South Africa branch register, and to holders of ADSs, each on the applicable record dates set out under the heading 'Key Dates' below.

Ex Div 1 Oct 20, paid 12 Nov 20.

https://www.investegate.co.uk/british-a ... 00076885U/

[idpickering]

I meant to add a comment to my above post, but run out of time to do so. lol

Either way, BATS are my HYP tobacco share of choice. I've topped up three times in the last nine months, and may well do so again. I have had a look at Imperial Brands to see if I might buy back into them, but something holds me back from doing so, and may well just stick with BATS.

Ian.

[Arborbridge]

I love that: "We are building a better tomorrow". From a tobacco company? Well, I suppose there is an arguable case

[Dod101]

Furthermore

'We are making good progress towards our target of 50 million non-combustibles consumers by 2030'

Just as well the 's' is there.

I do not have time right now to look in detail but as long as they keep the dividend coming that's fine by me.

Dod

[Gengulphus]

I love that: "We are building a better tomorrow". From a tobacco company? Well, I suppose there is an arguable case

Well, think about how bad they are today... They have huge amounts of room to make tomorrow better! ;-)

Gengulphus

[monabri]

Same price as March 2011. I wonder if it will fall further ?

[kempiejon]

Same price as March 2011. I wonder if it will fall further ?

If they can keep the dividend growth I'd buy more, by my sums anyone who bought in 2011 would have had what half their investment back in income.

[Gersemi]

If they can keep the dividend growth I'd buy more, by my sums anyone who bought in 2011 would have had what half their investment back in income.

I bought BATS in April 2009 and have just about had my entire investment back in dividends.

[MrFoolish]

If they can keep the dividend growth I'd buy more, by my sums anyone who bought in 2011 would have had what half their investment back in income.

I bought BATS in April 2009 and have just about had my entire investment back in dividends.

Past dividends aren't going to tell you much about the performance going forward. The trend is very much against smoking. Where is any future dividend growth going to come from?

[idpickering]

If they can keep the dividend growth I'd buy more, by my sums anyone who bought in 2011 would have had what half their investment back in income.

I bought BATS in April 2009 and have just about had my entire investment back in dividends.

Past dividends aren't going to tell you much about the performance going forward. The trend is very much against smoking. Where is any future dividend growth going to come from?

I hear you, but for me I like to think that their management are aware of the downward trend in smoking, and will diversify the firm accordingly. I’m not concerned about the future of BATS, and their ability to keep paying dividends at all.

Ian.

[Dod101]

BATs I think will keep churning out dividends for some time to come but whether that will make them a good investment I do not know. I hold them.

Dod

[Wizard]

Same price as March 2011. I wonder if it will fall further ?

Thank you for posting the chart, I bought IMB as part of my HYP build and while it has paid me a dividend it has also swallowed an eye watering amount of capital. At least the chart shows me that while I would be a little better off if I had bought BATs instead, I would still be nursing a massive capital loss.

[Wizard]

BATs I think will keep churning out dividends for some time to come but whether that will make them a good investment I do not know. I hold them.

Dod

The problem is that if / when they do faulter there will be very little capital left to deploy elsewhere. It can be a classic trap, share price halves then dividend is cut by 50%, but that doesn't matter because hey presto the share is paying the same yield as when you bought it. That is basically what IMB has done and there must be a risk BATs will do the same.

[Dod101]

I agre

BATs I think will keep churning out dividends for some time to come but whether that will make them a good investment I do not know. I hold them.

Dod

The problem is that if / when they do faulter there will be very little capital left to deploy elsewhere. It can be a classic trap, share price halves then dividend is cut by 50%, but that doesn't matter because hey presto the share is paying the same yield as when you bought it. That is basically what IMB has done and there must be a risk BATs will do the same.

I agree Wizard. I know that the tobaccos are not a good place to be but I am struggling for something else, although I am actively considering the Canadian banks.

[Arborbridge]

It's difficult to get used to the idea, but pretend you've surrendered your capital to an insurance company - it's gone, absolutely. In HYP one accepts that we intend to hold for ever and that some companies might actually disappear in a puff of smoke taking your capital with them.
What matters is the overall progress of the HYP income, and despite one or two disasters of my own, my HYP is still delivering - albeit at the moment things look bleak and the near-term jury is out.
Fix one's target over the long term like Terry, and you can see that for an average John Doe with not too much sophistication, HYP works. No one said HYP was the bestest ever invetment method - it doesn't need to be - it just needs to be good enough for the purpose.

If you think you are cleverer than that - the best of luck to you - I won't criticise, but instead admire your efforts.

Arb.

[absolutezero]

If they can keep the dividend growth I'd buy more, by my sums anyone who bought in 2011 would have had what half their investment back in income.

I bought BATS in April 2009 and have just about had my entire investment back in dividends.

Past dividends aren't going to tell you much about the performance going forward. The trend is very much against smoking. Where is any future dividend growth going to come from?

Marijuana. The Big Tobacco industry will evolve into Big Marijuana.

[dealtn]

It's difficult to get used to the idea, but pretend you've surrendered your capital to an insurance company - it's gone, absolutely. In HYP one accepts that we intend to hold for ever and that some companies might actually disappear in a puff of smoke taking your capital with them.
What matters is the overall progress of the HYP income, and despite one or two disasters of my own, my HYP is still delivering - albeit at the moment things look bleak and the near-term jury is out.

Well that is all well and good in that in surrendering your Capital to an insurance company in exchange (for an annuity product) they are giving you a surety of income. Existence of one and uncertainty of the other are both extinguished.

By saying "what matters is the overall progress of the HYP income..." you must accept that income is dependent on how that Capital is invested and how long it lasts. It is an illusion to think otherwise. Capital that disappears, be that overnight or over 20 years, will result in disappearing income.

Of course that's not to say that for most people most of the time a HYP strategy won't be "better" than an annuity alternative (regardless of whether it is better or worse than an alternative strategy), but making any claim that comes close to saying "Capital doesn't matter" ignores its importance in generating the income that clearly is important (at least for Income strategy pursuers).

[Arborbridge]

It's difficult to get used to the idea, but pretend you've surrendered your capital to an insurance company - it's gone, absolutely. In HYP one accepts that we intend to hold for ever and that some companies might actually disappear in a puff of smoke taking your capital with them.
What matters is the overall progress of the HYP income, and despite one or two disasters of my own, my HYP is still delivering - albeit at the moment things look bleak and the near-term jury is out.

Well that is all well and good in that in surrendering your Capital to an insurance company in exchange (for an annuity product) they are giving you a surety of income. Existence of one and uncertainty of the other are both extinguished.

By saying "what matters is the overall progress of the HYP income..." you must accept that income is dependent on how that Capital is invested and how long it lasts. It is an illusion to think otherwise. Capital that disappears, be that overnight or over 20 years, will result in disappearing income.

Of course that's not to say that for most people most of the time a HYP strategy won't be "better" than an annuity alternative (regardless of whether it is better or worse than an alternative strategy), but making any claim that comes close to saying "Capital doesn't matter" ignores its importance in generating the income that clearly is important (at least for Income strategy pursuers).

Users of this board know all the caveats, and my comments were meant within that context. With this audience there's no requirement to rehearse all the arguments - we are well versed in all the "that's-all-very-well" discussions - in fact it is not only not necessary to enter into such a discussion, but OT for the board
Mine was only a reminder to like minded persons - " pour encourager les autres" as it were.

Arb.

[Dod101]

I really really really do not think we need yet another argument about the merits or otherwise of a HYP.

Dod

[tjh290633]

Moderator Message:
OK, that's enough.

Stick to BATS for this thread.

TJH