BAT says volumes down, but to rebound in H2


BAT Zimbabwe chairman Kennedy Mandevhani and Managing Director Clara Mlambo

British American Tobacco Zimbabwe on Tuesday said volumes in the year to April 2016 were marginally below prior year but expect growth in the second half of the year driven by effective marketing strategies which include the Madison usadherere/ungadeleli Promotion.

In a trading update at the company’s Annual General Meeeting, Managing Director Clara Mlambo said sales were suffering from low consumer demand.

“Our volumes are much lower as compared to the same period last year. We expect the performance to pick up in the next three months going into the next half of the year,” said Mlambo.

said the operating environment remained depressed and BAT Zim was no exception as it continued to be affected by low demand.

She said the initiatives include the Madison promotion which has been a significant contributor to volumes for the past 14 years will improve the company’s volumes. Madison is said to accounts for 45 percent of group performance.

“In spite of the slowdown in volumes, the group had not lost its market shares. We are seeing a shrinking of the pie as opposed to us losing the market,” she said.

Mlambo said the bulk of the capex to be spent in the year will be deployed on trade marketing initiatives which include revamping marketing fleet to match international standards.

“The fleet is mainly an office so we will be improving its appearance, types and other interior improvements. Capacity over the past two years has averaged 75 percent,” she said

BAT Zimbabwe’s total volumes for the year ended 31 December 2015 reduced by nine percent while the local brand portfolio was down 10 percent.

Revenue for the year however grew by two percent to US$45,26 million driven by marginal gains from pricing net of the impact of the excise increase in November 2014.

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