British American Tobacco (BAT) on Thursday said the partial monetisation of its shareholding in ITC enabled it the initiation of a sustainable share buy-back programme.

UK-based cigarette major BAT, the largest shareholder of the Kolkata-headquartered ITC, sold 3.5 per cent stake in the diversified conglomerate in March this year. As a result of the sale, the British company’s shareholding in its Indian associate reduced to 25.49 per cent as on June 30, 2024, from 29.02 per cent as on December 31, 2023. Net proceeds from the stake-sale stood at around £1.58 billion.

“Partial monetisation of ITC stake enabled the initiation of a sustainable share buy-back programme, with £700 million in 2024 and £900 million in 2025,” Tadeu Marroco, Chief Executive, British American Tobacco, said on Thursday after announcing the half-year results for the six months to June 30.

Returning cash

Notably, BAT has been under pressure to return more cash to its shareholders.

“BAT is a highly cash-generative business, and we are committed to continuing to reward shareholders with strong cash returns. We have made progress in enhancing financial flexibility,” Marroco said.

The British company’s earnings per share (EPS) were also positively impacted by the share buy-back programme.

“...we delivered organic, constant currency, adjusted diluted EPS, up 1.3 per cent. Our performance benefitted from lower net finance costs, tax and share count… which was partially offset by our reduced share of ITC profits,” Soraya Benchikh, Chief Financial Officer, said, while commenting on the performance of the London-based tobacco giant for the first half of 2024. EoM