BAT
BRITISH AMERICAN TOBACCO has recently been rising and now yields under 6 per cent—in fact, 5.7 per cent at the current price of 64s. But there may be some increase in the final dividend. BAT's subsidiary in America (Brown and Wil- liamson) has had an outstanding year, with sales up 15 per cent. Last year this subsidiary accounted for 36 per cent of the net profits and this year perhaps 40 per cent. The half-yearly profits of BAT were good and results for the full year, which ended on September 30, should be excellent. Corporation tax will have an ad- verse effect, but the over-spill relief should bring the extra dividend cost down to £2 million. The company's brokers are therefore hoping for an extra in the final. If the directors could bring the year's distribution up from 2s. 2d.. tax-free, to, say, only 2s. 4d., the gross yield would be 6.2 per cent.
Previous page
