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Capital Structure & Dividend Policy of

British American Tobacco Bangladesh
Company Limited (BATBC) & National
Tea Company Limited (NTC).
Afruja Akter Jisa
ID#26031

Two Companies Target Company(British American Tobacco Bangladesh Company

Limited.)
Peer Company( National Tea Company Limited)

About Company
British American Tobacco Bangladesh Company Limited (BATBC):

Operating since 1910 in the country.

Manufactures and markets cigarettes.
Was enlisted with the DSE in year 1977 and the CSE in year 1996.
Around 72.91% shares of the company are held by the Sponsors whereas Institutional Investors,
General Investors and the Government held 13.61%, 12.84% and 0.64% respectively.
Paid up capital is tk 600 (mn). Net Profit after tax in 2014was 6281 (mn).

National Tea Company Limited (NTC):

Formed in the year 1978 under the Companies Act , 1913

Occupies a unique position of being the first in the field of joint ownership of Public and Private
interest in Tea sector. (Government and its financial organization holds 51% of shares and rest
49% by the General Public).
Listed Company since 1978 and its shares are being traded at both Dhaka and Chittagong Stock
Exchanges.
Paid-up capital is tk 66 (mn). In 2014 its Net profit after tax was tk 42 (mn).

Corporate Goal
British American Tobacco Bangladesh Company Limited
Achieve Leadership of the Global Tobacco Industry not just in volume and value, but also in the
quality of their business. To be industry leaders they must continue to demonstrate that they are a
responsible tobacco Group with outstanding people, brands and superior products.

National Tea Company Limited

To achieve excellence in consumer satisfaction by providing top quality tea .
To create a dynamic & proactive environment for the employees.
Be a developer in the industry.
Move forward and grow at the same time consolidate the position based on the consumers.

CSR Activities
British American Tobacco Bangladesh Company Limited
"Success and responsibility go together" is the philosophy that has driven British American
Tobacco Bangladesh over the years. They are the number one taxpayer in the tobacco industry of
Bangladesh. One of their core business philosophies is doing business in the most ethical and
socially acceptable manner. 'They are taking forward their commitment for contributing in the
development of the country through their endeavors in the various social, economic and
environmental sectors of the country.

Dishari.
Afforestation.
Community Services Initiative in leaf growing areas.

National Tea Company

National Tea Company are not far away from people. Throughout its journey it has engaged itself
in many activities that helped people. As a part of these activities they are committed to do some
better for the society because they believe that society is their base and the societys people are
their power. They are truly stood for providing the society, significant new capabilities successful
careers to all. They stand behind the natural hazards affected people in the time of natural
calamities. Contribute to the social cultural programs and activities and also the development
activities. They also engaged in tree plantation activities in different place of the country.

Analysis of Capital
Structure
Solvency ratio (Stock Concept)
Firm

40%

British American Tobacco Bangladesh Company

Average

Year

Debt Ratio

2010

2011

2012

2013

Industry

35%
30%
25%

2014

20%
15%
10%

D/E Ratio
Debt Ratio

0.006
0.003

Firm

0.003
0.001

0.001
0.001

0.000
0.000

0.000
0.103

.002
.002

1.49
.50

5%
0%
2010

2011

2012
BATBC

2014

NTC

Debt Equity Tatio

National Tea Company

Average

2013

Industry
35%

Year

2010

2011

2012

2013

2014

30%
25%
20%

D/E Ratio
Debt Ratio

0.254
0.171

0.297
0.312

0.241
0.229

0.216
0.241

0.188
0.253

.239

1.49

.241

.50

15%
10%
5%
0%
2010

2011

2012

2013

2014

Analysis of Capital Structure

ICR

Solvency ratio (Flow concept)

900.00
800.00

Firm

British American Tobacco Bangladesh Company

Year

2010

2011

2012

2013

2014

ICR

253.52

44.39

54.23

811.74

69.06

246.59

DSCR

62.95

36.13

50.38

106.67

73.75

65.976

700.00

Average

600.00
500.00
400.00
300.00
200.00
100.00
0.00
2010

2011

2012

2013

2014

DSCR
Firm

National Tea Company

120.00

Year

2010

2011

2012

2013

2014

ICR

7.30

1.97

6.24

6.44

0.87

Average
4.57

100.00
80.00
60.00

DSCR

4.95

1.31

3.21

3.68

.68

2.766

40.00
20.00
0.00
2010

2011

2012

2013

2014

Analysis of Capital
Structure
Profitability and leverage ratio
Firm

Average

Year

2010

2011

2012

2013

2014

Gross Profit Margin

35.66%

42.17%

41.95%

43.95%

45.76%

41.90%

20.65%

22.70%

25.16%

30.44%

32.36%

26.26%

14%

11%

14%

16%

18%

14.49%

46%

43%

56%

55%

55%

51.09%

ROA

21.53%

15.53%

26.22%

26.67%

23.20%

22.63%

OROA

22%

19%

26%

30%

24%

24%

Operating Profit
Margin
Net Profit Margin
ROE

British American Tobacco Bangladesh Company

Analysis of Capital Structure

Firm

Average

Year

2010

2011

2012

2013

2014

Gross Profit Margin

49.98%

32.79%

46.33%

42.59%

27.00%

39.74%

33%

12%

28%

21%

7%

20.38%

Net Profit Margin

23%

9%

22%

19%

5%

15.63%

ROE

36%

10%

27%

20%

5%

19.48%

13%

4%

13%

9%

2%

8.32%

13%

3%

11%

7%

1%

7%

Operating Profit
Margin

ROA
OROA

National Tea Company

Analysis of Capital Structure

ROA
BATBC

ROE

NTC

100%
49%
43%
31%

40%

17%

15%

2011

2012

10

2%
2014

2013

35%
30%
25%
20%
15%
10%
5%
0%
2010

0%
2010

10%

4%
2010

50%

30%

2011

2012

OROA

2011

2012

2013

2014

2013

2014

Analysis of Capital Structure

Cost of Debt
10%
8%
6%
4%
2%
0%

Cost of Equity
5%
5%
5%
4%
4%
4%

2014

2014

Cost of Capital
BATBC

NTC
6%

3%

11

2014

Analysis of Capital Structure

Leverage Ratio
Firm

British American Tobacco Bangladesh Company

Year

2010

2011

2012

2013

2014

Financial Liability
Leverage

-19%

-12%

-30%

-20%

11%

-14%

Operating
Liability
Leverage

141%

201%

163%

134%

101%

148%

Firm

12

National Tea Company

Average

Average

Year

2010

2011

2012

2013

2014

Financial Liability
Leverage

38%

71%

38%

38%

43%

45%

Operating
Liability
Leverage

74%

48%

48%

46%

47%

53%

Analysis of Capital Structure

Factors affecting capital structure
Firm
Year

BATBC (million)
2010

1214.5
Corporate Tax 5

2011

2012

2013

2014

2010

2011

2363.0
6

2559.8
2

4179.54

4584.35

60.98

4.39

Firm
Year
Tangibility

BATBC
2010
40%

2011
33%

Firm

13

NTC (million)

2012
39%

2012

2013

37.76 23.14

2014
11.66

NTC
2013
46%

2014
44%

2010
73%

2011
74%

BATBC

2012
76%

2013
73%

2014
76%

NTC

Year

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

F. Slack

10%

5%

15%

10%

6%

3%

4%

5%

6%

6%

Analysis of Capital Structure

Firm

British American Tobacco Bangladesh Company

Year

2010

2011

2012

2013

2014

EBIT

4093.144

4913.656

6501.462

9103.673

10866.28

Firm

National Tea Company

Year

2010

2011

2012

2013

2014

EBIT

288.495

54.819

226.850

173.675

35.551

CV EBIT
0.50
0.40
0.30
0.20
0.10
0.00

14

2014

Analysis of Dividend Policy

British American Tobacco Bangladesh Company
Name of
Company

2010

EPS

47.98

Industry

12.23

2011
42.51
9.23

2012

2013

2014

65.69

82.07

104.70

10.98

13.64

9.85

% of Dividend

43%

42%

50%

52%

45%

Pay out Ratio

.90

.99

.76

.63

.43

Remarks

Stable
Dividend
Policy

National Tea Company

15

Name of
Company

2010

2011

2012

2013

2014

EPS

26.59

8.10

29.88

24.46

6.38

Industry

12.23

9.23

10.98

13.64

9.85

% of Dividend

25%

20%

20%

30%

20%

Pay out Ratio

.94

2.47

.67

1.23

3.14

Remarks

Stable
Dividend
Policy

Analysis of Dividend Policy

British American Tobacco Bangladesh Company

Year
Particulars
2010

2011

2012

2013

2014

Earning Per Share

47.98

42.51

65.69

82.07

107.70

Scale Earning Per Share

47.98

42.51

65.69

82.07

107.70

Cash Dividend Per Share

43

42

50

52

45

Scale Cash Dividend Per Share

43

42

50

52

45

Stock Dividend Per Share

Total Dividend Per Share

43

42

50

52

45

Dividend Payout Ratio

.90

.99

.76

.63

.43

Retention Ratio

.10

.01

.24

.37

.57

60000000

60000000

60000000

60000000

No. of Shares Outstanding

16

60000000

Analysis of Dividend Policy

National Tea Company

Particulars

17

Year
2010

2011

2012

2013

2014

Earning Per Share

26.59

8.10

29.88

24.46

6.38

Scale Earning Per Share

26.59

8.10

29.88

24.46

6.38

Cash Dividend Per Share

25

20

20

30

20

Scale Cash Dividend Per Share

25

20

20

30

20

Stock Dividend Per Share

Total Dividend Per Share

25

20

20

30

20

Dividend Payout Ratio

.94

2.47

.67

1.23

3.14

Retention Ratio

.06

-.17

.33

-.23

-2.14

No. of Shares Outstanding

6600000

6600000

6600000

6600000

6600000

Analysis of Dividend Policy

Factors Affecting Dividend Policy:
British American Tobacco Bangladesh Company
Particulars

2010

2011

2012

2013

2014

3212.351

3064.213

9393.209

6023.998

4764.537

1127.71

2384.076

8307.109

2647.206

392.09

OCF per Share

53.54

51.07

156.55

100.40

79.41

FCF per Share

18.80

39.73

138.45

44.12

6.53

Dividend Payout Ratio

0.90

0.99

0.76

0.63

0.43

Market Price at the end of the Year

718.42

606.28

863.21

1633.1

2674.64

P/E ratio

14.97

14.26

13.10

19.90

25.55

P/E times of industry

37.31

42.53

20.78

72.26

40.72

OCF
FCF

18

Year

Analysis of Dividend Policy

National Tea Company

Particulars

2010

2011

2012

2013

2014

262.4315

7.8179

244.1438

112.6142

108.1121

175.7531

-92.2676

119.5923

-7.68999

-1224.14

OCF per Share

39.76

1.18

36.99

17.06

16.38

FCF per Share

26.63

-13.98

18.12

-1.17

-185.48

Dividend Payout Ratio

0.94

2.47

0.67

1.23

3.14

Market Price at the end of the Year

574.3

510.7

736.6

810.9

710.5

P/E ratio

21.60

63.02

24.65

33.16

111.39

P/E times of industry

37.31

42.53

20.78

72.26

40.72

OCF
FCF

19

Year

Analysis of Dividend Policy

Growth:
BATBC

NTC

Year
2010

Growth

5%

2011

1%

2012

13%

2013

20%

2014

31%

2010

2%

2011

2012

-14%

9%

2013

2014

-4%

-11%

Growth
40%
30%
20%
10%
0%
2010
-10%
-20%

20

2011

2012

2013

2014

Analysis of Dividend Policy

Particulars

21

BATBC

NTC

Covariance

0.001566443

0.000586042

Variance of market return

0.006847733

0.006847733

Beta

0.228753576

0.085581921

Market return

0.001901055

0.001901055

Market return-yearly

0.022812662

0.022812662

22

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24