MARC HASENFUSS: No smoke without ire for BAT
British American Tobacco has achieved sparkling results, but illicit trade in its new tobacco products is a concern
British American Tobacco (BAT) has been blazing brightly lately. Shares are up 14% and 13% on the JSE and London Stock Exchange respectively over a month. Year to date the gains are a sprightly 19% and 18% respectively. That will blow smoke up those punters who dismissed BAT as a slowly smouldering dividend play. I’m ambivalent about BAT these days — tempted by a dirt-cheap valuation on a cash-generative vice, but equally turned off by a dirty and dangerous habit. In any event, my compromise is an indirect exposure to BAT via Reinet Investments. To be honest, if Reinet, which is now receiving dividends from its considerably bigger investment in specialist financial services, offloaded its BAT shares tomorrow, I would not be in the least bit fazed.
While a good number of market commentators seemed positive about the recent interim results, BAT’s half-year numbers to my mind also raise a couple of burning questions. The first centres on the growth in so-called new categorie...
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