Thursday tips round-up: British American Tobacco, Plus500
Reported revenues at British American Tobacco dropped by 9.6% over the first nine months of the year as the value of sales was hit by a strong pound and volumes dropped 3%. That should however have already been known to the market. What may not have been accounted for yet and which would explain yesterday’s drop in the share price is that in the third quarter the declines accelerated. The firm does not provide quarterly figures so you need to do the maths yourself. It would seem that as competition stiffens the pressure on consumer spending is leading some smokers to downshift or go for smuggled products. Also pressuring the group’s results were weak trading in Russia and high comparators in Brazil. Furthermore, price increases in Australia and Malaysia had to be reversed. However, despite the slowdown in consumer spending around the globe the company’s dividend yield is attractive, so ‘hold’, Tempus says.
British American Tobacco
2,355.00p
16:49 03/05/24
FTSE 100
8,213.49
16:59 03/05/24
Plus500 Ltd (DI)
2,210.00p
16:40 03/05/24
Following the return of volatility to the markets AIM-listed trading platform Plus500 now expects to beat revenue and profit expectations for the full year. Recent sharp price movements across all financial markets led to a 181% rise in revenues in the latest quarter to hit $56.2m. Nine month sales have now in fact almost already reached analysts’ forecast for the year. Indeed, clients seem avid to partake of the increased volatility, with the company having signed up 14,850 new customers over those three months, a more than 17% increase in comparison to the prior year. Likewise, the number of active customers rose by 18% in the third quarter and more of the new customers are staying and spending more – 138% more to be exact. Furthermore, the fact that the company is mainly a digital operation means that it is a lean outfit in terms of cost, allowing it to generate lots of cash which it likes to return to shareholders. It’s risky, but the time seems ripe to get back in. Buy, says The Daily Telegraph’s Questor team.