Latest news with #TadeuMarroco
Time of India
10-08-2025
- Business
- Time of India
British American Tobacco awaiting RBI approval to check out of ITC Hotels
Kolkata: British American Tobacco (BAT) is awaiting Reserve Bank of India (RBI) approval before it can sell its 15.29% shareholding in ITC Hotels . BAT is ITC's single largest shareholder. This is required as the ITC holding dates back to the early 1900s, BAT chief executive Tadeu Marroco told analysts on an earnings call last week. Unlocking Shares "Sometimes things take longer for us to be able to unlock those shares, get the right approvals in the right forums," he had said. "In this case, it's the central bank in India, in order to be able to transact." Once this comes through, BAT will embark on selling the holding as it will help the company return to the corridor of 2-2.5x adjusted net debt/ebitda by the end of 2026. "We intend to use the proceeds of the hotel to deleverage further the company," he said. The hotels business was demerged from ITC in January. Under the plan, ITC shareholders hold 60% of the unit with the rest owned directly by ITC. As a result, BAT owns 15.29% in ITC Hotels as a foreign direct investment, making it the largest public shareholder after ITC's promoter holding of 39.87%, as per the shareholding pattern at the end of June. As of June, ITC Hotels had a portfolio of over 200 hotels-143 operational and 58 in the pipeline. Analysts tracking the company said RBI's approval is required since this deal involves a foreign company selling its shares in an Indian company and taking the money out of India. They added that it could also have something to do with ITC being a tobacco company and FDI not being allowed in the segment. Marroco said BAT wants to divest the stake as it "strategically" doesn't want to be in the hotel business. Capital Flexibility BAT recently reduced its holding in ITC through two block deals after receiving RBI approval-in February last year (3.5%) and May this year (2.5%)-lowering its holding in the cigarette-to-FMCG major to 22.93% from 29%. Marroco said in the latest earnings release that BAT's continued strong cash conversion and the recent partial monetisation of its ITC stake has enhanced its capital flexibility. The company received 1.1 billion from the May stake sale, which increased its share buyback for 2025 from 0.9 billion to 1.1 billion. BAT declared that as part of the demerger accounting of ITC Hotels, ITC recognised the excess of the fair value over the carrying value of the hotels business as an adjusting item. BAT's share of this adjusted gain amounted to 333 million (net of tax), it said in the earnings release.
The Independent
31-07-2025
- Business
- The Independent
BAT upbeat on sales as nicotine pouches surge in popularity
Lucky Strike and Dunhill firm British American Tobacco (BAT) has said strong demand for smokeless products such as nicotine pouches is set to help deliver sales growth at the top end of forecasts. In the first six months of 2025, the group added another 1.4 million new customers of smokeless products, which now account for 18.2% of group sales. It also saw sales and profit return to growth in the US market for the first time in seven years, helped by the launch of Velo Plus nicotine pouches, with this category seeing revenues soar by 384% to £105 million. Revenues overall lifted 1.8% on a constant currency basis to £12.1 billion in the six months to June 30, although underlying pre-tax profits fell 1.3% to £4.96 billion. British American Tobacco (BAT) said sales were now expected at the higher end of its full-year revenues guidance for growth of between 1% to 2%. It remains on track for annual profits to grow by as much as 2.5%. Shares in the firm hit their highest level since 2018 after rising by as much as 2% in Thursday morning trading. Tadeu Marroco, chief executive of BAT, said the first half was 'slightly ahead of expectations'. He added: 'I am very pleased with our performance in the US. 'Revenue and profit are both up for the first time since 2022 and, alongside the successful launch of Velo Plus, our combustibles volume and value share performance have returned to growth.'
Yahoo
25-06-2025
- Business
- Yahoo
British American Tobacco (BTI) Leverages 6.1% Yield to Extend Railly
Over the past year, British American Tobacco (BTI) has gained 51%, driven in part by investor demand for reliable dividend income amid growing expectations of lower interest rates. High-quality dividend payers, such as BTI, which has boasted 29 consecutive years of dividend increases, tend to perform well in such environments. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter While the yield has decreased from a peak of 10% to 6.1%, primarily due to the share price rally, BTI's strong fundamentals suggest further upside potential. Here's a closer look at what continues to support the company's momentum and why I remain bullish on the tobacco giant. British American Tobacco's core combustible business, which includes brands like Camel and Lucky Strike, remains a powerhouse. In this month's 2025 half-year pre-close trading update, management reported a return to growth in the U.S., a critical market, driven by stronger delivery in combustibles. Organic sales for combustibles nudged up 0.1% at constant rates, with a 5.3% price/mix improvement offsetting a 5.2% volume decline. This resilience is a remarkable achievement for a 'struggling' tobacco major, as combustibles still account for over 80% of revenue. Despite global smoking rates dropping at a rate of mid-single digits annually, BTI's ability to raise prices and maintain margins showcases its pricing power. Additionally, CEO Tadeu Marroco highlighted cost savings of £402 million in 2024, which will help counter inflationary pressures, such as higher leaf prices, making the strong sales seem all the more impressive. Overall, with the U.S. market showing signs of stabilization, combustibles continue to fund BTI's transformation while delivering steady cash flows for dividends and buybacks. BTI's pivot to 'new categories', including vaping, heated tobacco, and oral nicotine products, is also gaining traction. The latest trading update highlighted an 8.9% organic revenue jump in these segments, with Velo Plus nicotine pouches leading the charge in the U.S. Management noted strong customer retention for Velo, which is closing the gap with Philip Morris's Zyn. Meanwhile, Glo Hilo, an upgraded heated tobacco device, is expanding into new markets, boosting competitiveness. Though new categories contribute less than 15% of revenue compared to Philip Morris's (PM) 40%, BTI's innovation is paying off, in my view. In fact, the company raised its 2025 revenue growth guidance to 1%-2% from 1%, citing better-than-expected first-half performance in modern oral products. The CEO's confidence in achieving 3-5% revenue growth by 2026 suggests that BTI's smokeless portfolio is no longer a side hustle, or a bet, as many would argue, but a meaningful growth driver. And while it is fair to criticize that vaping volumes dipped 9% in the first half, Vuse remains a U.S. market leader. BTI's focus on premiumization and innovation, such as synthetic nicotine in Velo Plus, positions it to capture market share in a rapidly evolving nicotine market. This segment's momentum suggests BTI is building a future beyond cigarettes. After a 57% rally, one might expect British American Tobacco (BTI) to look expensive—but it still trades at a forward P/E just under 11 while the sector median hovers at ~16, an attractive valuation even for a so-called 'sin' stock. On a trailing twelve-month basis, BTI's P/E ratio is currently 28, while the sector average is 22, indicating that although the market may view BTI as slightly overvalued today, the next twelve months appear promising. Moreover, the company continues to generate strong cash flow and has raised its dividend for 29 consecutive years. While the yield has declined from around 10% to 6.6%, this is a result of share price appreciation, not a dividend cut. In fact, if interest rates decline as expected, BTI's dependable yield could draw even more investor interest, potentially driving the stock higher. The company's $1 billion share buyback last year, while modest relative to its $108 billion market cap, enhances the total shareholder return. Factoring in the buyback, the blended yield rises to about 7.5%, offering even more appeal. Altogether, BTI's low valuation, strong income profile, and capital return strategy provide a compelling case for continued upside—with a margin of safety—even as the stock pushes toward new 52-week highs. Wall Street's stance on British American Tobacco is bearish, although with only a handful of analysts covering the stock. As things stand, BTI carries a Moderate Sell consensus based on one Sell rating in the past three months. BTI's average 12-month price target of $35.50 implies a potential downside of about 28%, suggesting that many analysts believe the stock may have already priced in much of its recent strength. Despite its 57% rally, BTI remains a strong investment option. With a 6.1% dividend yield, a valuation of less than 11x forward earnings, and solid cash flow supporting both dividends and share buybacks, BTI stands out among income-focused opportunities. Its core combustibles business remains resilient, while growth in smokeless products, such as Velo, signals a forward-looking pivot. While regulatory headwinds and the transition to next-gen products pose challenges, BTI's global footprint and disciplined capital strategy position it well for investors seeking reliable yield and potential upside, especially in a rate-cutting environment. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Business Insider
24-06-2025
- Business
- Business Insider
British American Tobacco (BTI) Leverages 6.1% Yield to Extend Railly
Over the past year, British American Tobacco (BTI) has gained 51%, driven in part by investor demand for reliable dividend income amid growing expectations of lower interest rates. High-quality dividend payers, such as BTI, which has boasted 29 consecutive years of dividend increases, tend to perform well in such environments. Confident Investing Starts Here: While the yield has decreased from a peak of 10% to 6.1%, primarily due to the share price rally, BTI's strong fundamentals suggest further upside potential. Here's a closer look at what continues to support the company's momentum and why I remain bullish on the tobacco giant. Combustibles Represent Steady Cash Cow for BTI British American Tobacco's core combustible business, which includes brands like Camel and Lucky Strike, remains a powerhouse. In this month's 2025 half-year pre-close trading update, management reported a return to growth in the U.S., a critical market, driven by stronger delivery in combustibles. Organic sales for combustibles nudged up 0.1% at constant rates, with a 5.3% price/mix improvement offsetting a 5.2% volume decline. This resilience is a remarkable achievement for a 'struggling' tobacco major, as combustibles still account for over 80% of revenue. Despite global smoking rates dropping at a rate of mid-single digits annually, BTI's ability to raise prices and maintain margins showcases its pricing power. Additionally, CEO Tadeu Marroco highlighted cost savings of £402 million in 2024, which will help counter inflationary pressures, such as higher leaf prices, making the strong sales seem all the more impressive. Overall, with the U.S. market showing signs of stabilization, combustibles continue to fund BTI's transformation while delivering steady cash flows for dividends and buybacks. Smokeless Growth Accelerates to BTI's Advantage BTI's pivot to 'new categories', including vaping, heated tobacco, and oral nicotine products, is also gaining traction. The latest trading update highlighted an 8.9% organic revenue jump in these segments, with Velo Plus nicotine pouches leading the charge in the U.S. Management noted strong customer retention for Velo, which is closing the gap with Philip Morris's Zyn. Meanwhile, Glo Hilo, an upgraded heated tobacco device, is expanding into new markets, boosting competitiveness. Though new categories contribute less than 15% of revenue compared to Philip Morris's (PM) 40%, BTI's innovation is paying off, in my view. In fact, the company raised its 2025 revenue growth guidance to 1%-2% from 1%, citing better-than-expected first-half performance in modern oral products. The CEO's confidence in achieving 3-5% revenue growth by 2026 suggests that BTI's smokeless portfolio is no longer a side hustle, or a bet, as many would argue, but a meaningful growth driver. And while it is fair to criticize that vaping volumes dipped 9% in the first half, Vuse remains a U.S. market leader. BTI's focus on premiumization and innovation, such as synthetic nicotine in Velo Plus, positions it to capture market share in a rapidly evolving nicotine market. This segment's momentum suggests BTI is building a future beyond cigarettes. BTI Remains a Bargain Despite Its Recent Rally After a 57% rally, one might expect British American Tobacco (BTI) to look expensive—but it still trades at a forward P/E just under 11 while the sector median hovers at ~16, an attractive valuation even for a so-called 'sin' stock. On a trailing twelve-month basis, BTI's P/E ratio is currently 28, while the sector average is 22, indicating that although the market may view BTI as slightly overvalued today, the next twelve months appear promising. raised its dividend for 29 consecutive years. While the yield has declined from around 10% to 6.6%, this is a result of share price appreciation, not a dividend cut. In fact, if interest rates decline as expected, BTI's dependable yield could draw even more investor interest, potentially driving the stock higher. The company's $1 billion share buyback last year, while modest relative to its $108 billion market cap, enhances the total shareholder return. Factoring in the buyback, the blended yield rises to about 7.5%, offering even more appeal. Altogether, BTI's low valuation, strong income profile, and capital return strategy provide a compelling case for continued upside—with a margin of safety—even as the stock pushes toward new 52-week highs. What is the Price Target for BTI? Wall Street's stance on British American Tobacco is bearish, although with only a handful of analysts covering the stock. As things stand, BTI carries a Moderate Sell consensus based on one Sell rating in the past three months. BTI's average 12-month price target of $35.50 implies a potential downside of about 28%, suggesting that many analysts believe the stock may have already priced in much of its recent strength. BTI Offers Yield, Value, and Further Growth Potential Despite its 57% rally, BTI remains a strong investment option. With a 6.1% dividend yield, a valuation of less than 11x forward earnings, and solid cash flow supporting both dividends and share buybacks, BTI stands out among income-focused opportunities. Its core combustibles business remains resilient, while growth in smokeless products, such as Velo, signals a forward-looking pivot. While regulatory headwinds and the transition to next-gen products pose challenges, BTI's global footprint and disciplined capital strategy position it well for investors seeking reliable yield and potential upside, especially in a rate-cutting environment.
Time of India
15-06-2025
- Business
- Time of India
BAT may begin phased stake sale in ITC Hotels: Sources
British American Tobacco (BAT) is likely to begin a phased sale of its stake in ITC Hotels , following the hospitality company's demerger from ITC Limited earlier this year, sources told ET NOW. The sale could begin in the coming weeks, though the extent of the offloading remains unclear. The move aligns with BAT's earlier stance that it does not intend to be a long-term shareholder in ITC Hotels. The company currently holds a 14.55% stake in the recently demerged entity. The demerger of ITC Hotels from ITC Limited took effect on January 1, 2025, with January 6 set as the record date. Post-demerger, ITC retained a 40% stake in ITC Hotels. Sources said BAT intends to use proceeds from the stake sale to deleverage its balance sheet. The company had made a similar move in May, offloading a 2.5% stake in ITC Limited for approximately $1.4 billion, at Rs 413 per share. BAT CEO Tadeu Marroco had previously confirmed the company's lack of interest in holding onto its ITC Hotels stake, reinforcing expectations of a gradual exit. Live Events Also Read: These 11 Nifty microcap stocks can rally 55-210% in the next 12 months ITC Hotels reported a 19% year-on-year rise in consolidated net profit to Rs 257.85 crore for Q4 FY25, compared to Rs 216 crore a year earlier. Revenue from operations rose to Rs 1,060.62 crore from Rs 1,015.4 crore in the same period. For the full financial year 2024-25, the company posted a consolidated net profit of Rs 637.64 crore and revenue of Rs 3,559.81 crore. Also Read: Swiggy, Radico Khaitan among 7 stocks on which brokerages initiated coverage, see up to 34% upside On Friday (June 13), ITC Hotels shares declined 1.7% to close at Rs 213.9 on the BSE. Also Read: KEI Industries, DCB Bank among 10 small-cap stocks analysts expect to gain up to 75%
