BATBC share price soars after declaration of high dividends

The share price of British American Tobacco Bangladesh Company Limited (BATBC) has risen due to healthy profits and announced 600% cash and 200% stock dividends for 2020.

On Thursday, its share price soared by 13% or Tk190.6 to reach Tk1,700 each, which is the second highest increase amongst listed companies.

The newly listed company Taufika Foods and Agro Industries Limited's share price rose by 50%, which was the highest increase in share price.

The BATBC posted a record profit in 2020.

The company's profit rose by 18% while its accumulated profit increased by 19% to Tk3,213 crore amid the pandemic in 2020. The company's profit was Tk2,685 crore in 2019.  

Its earnings per share (EPS) was Tk60.48 in 2020, compared to Tk51.37 in the previous year.

The board of directors of BATBC has recommended a 1:2 bonus as stock dividends. Previously in 2018, the company had also issued a 200% bonus as stock dividends.

Yesterday, the company said, "The bonus shares were issued to achieve the optimum capital base considering the size and the growth of the company's business. The company has declared the bonus shares taking into consideration the utilisation of the accumulated profit, which stood at Tk3,213 crore."

It also said, "Bonus shares have not been declared from capital reserve or revaluation reserve or any unrealised gain or from profits earned prior to incorporation of the company, nor by reducing paid-up capital or by doing anything to create a negative post-dividend retained earnings or a debit balance."

The BATBC was listed on the stock exchanges in 1977. The company has enjoyed a good business performance in Bangladesh from the very beginning and shareholders have also received good feedback from their investment in the company.

As of 31 January 2021, of BATBC's 18 crore shares, sponsors and directors of the company hold 72.91%, the Bangladesh government holds 0.64%, institutional investors hold 12.04%, foreign investors hold 11.14%, and general shareholders hold 3.27%.