Tobacco Sales expects 31pc profit increase

The Herald, March 20, 1980

THE Tobacco Sales group should have even better results this year than 1979, says the chairman, Mr CG Tracey, who forecasts a 31 percent increase in taxed profit to $2,1 million.

In his review of the year ended October 31 he says the dividend should rise by 4c to 28c a share and earnings by 25 percent to 65c a share.

The annual report says Tobacco Sales and Producers’ floor had a very good selling season and sold more than its competitors, at a higher price for each kilogramme for the fourth successive year.

“With a return to normality, floor prices must improve significantly to ensure that growers receive adequate returns to enable them to improve their hardpressed capital resources as well as the wage potential of their employees.”

Tobacco Sales Warehouse results were marred by the bad debt situation of Tobacco Finance (which is closing down at the end of the selling season).

Most of the other subsidiaries and associates had good years, especially Agricura.

“The advent of local formulation has dawned and it is pleasing to report that Agricura has erected a wettable formulation plant, which has successfully produced a substantial portion of the nation’s Atrazine requirements at most competitive prices and at present is formulating Carbaryl,” says the group’s annual report.

However, the future of an associate company, Agriculture Investments, is in doubt and one of its shareholders and loan creditors is considering liquidation.

“Your company objects to this course of action because it is contrary to the original shareholders’ understanding and the timing of such liquidation proceedings is most unfortunate.”

Lessons For Today

◆ Tobacco is a very valuable crop in the country as it is the country’s largest foreign currency earner in terms of agricultural produce.

It sustains a whole value chain from the farmer right through to industries that add value to the crop such as cigarette manufacturers.

◆ The opening of the tobacco marketing season each year is a significant development in the country as it triggers massive inflows of foreign currency into the country through merchants that come in to buy the crop.

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