Market Leader Updates

22 March 2017

This week, our broking team have been looking at the market leaders in various sectors, analysing recent performances as well as future prospects.



Maintaining its reputation for innovation, last year Mastercard took the opportunity to increase its online payments volume, as well as  making further inroads into the mobile payments market through an extension of their partnership with PayPal.

Charting the way forward for the company, much of the firm’s performance will rely on further investments in data analytics and security. At the recently held ‘Mobile World Congress 2017’ in Barcelona, Mastercard revealed its plan to expand the firm’s Qkr! mobile order platform to the US and five other countries. In addition to this, the firm will also integrate with retail software provider Oracle this year, with an aim to streamline digital payment experiences for retail and hospitality.


In its recent first quarter fiscal 2017 results, Visa witnessed a 25% rise in revenue, thanks to the company’s acquisition of Visa Europe and solid growth in payments volume as well as processed transactions. CEO Alfred F. Kelly Jr. termed the firm’s business fundamentals as strong while commenting that there seems to be a good momentum in the business, driven by domestic and cross-border volumes. With mobile commerce growing at a steady clip, innovation in this area, which veers towards customer convenience and security, will be crucial for Visa to increase its market share and boost revenues further.



During the latter half of 2016, the technology behemoth introduced two new products. It launched the ‘Google Assistant’, an artificially intelligent personal assistant with a conversational interface, and its first smartphone; Pixel.  These releases are enabling the tech giant to compete head to head with Apple, its primary competitor. The company is set to launch a successor to the Pixel in 2017. Further, the company will launch its live TV service – YouTube TV this year, targeting the growing number of consumers who are being weaned away from traditional television.


British American Tobacco

The world’s largest tobacco company reported that its cigarette volumes rose 0.2% to about 665 billion last year. Adjusted profit from operations climbed 9.8% to £5.48 billion while revenue grew 12.6% to £14.75 billion, driven by weakness in the Pound. The cigarette maker boosted its dividend by 10% to 169.4p from 154p, and remains confident of posting growth in 2017.

As consumers today have become more health cautious, the company has already earmarked over $1 billion for development of products which would serve as an alternative to cigarettes. CEO Nicandro Durante announced some major plans to expand its “next-generation” products unit, with the company mulling a swift expansion for its vaping business in 2017 & 2018, enabling it to move forward to corner a significant share of this fast-growing market. It is planning to double the number of countries where it sells e-cigarettes and vaping products in 2017.

Initial results for its new tobacco heating system device ‘Glo’ were positive in Japan and the company expects to roll out the product in 2017 and develop new versions in the coming time. For traditional cigarettes, the company expects that sales would continue to increase in key markets, especially in North Africa and Asia. Additionally, the deal to acquire Reynolds American will strengthen its market position for e-cigarettes and other cigarette alternatives. The company expects to complete the Reynolds deal in the third quarter of 2017.

Imperial Brands

Imperial Brands reported a 10% growth in tobacco net revenue in 2016 as the US cigarette brands it acquired last year performed well during the period. The Growth and Specialist brands generated about 61% of the total net revenue.

The main goal of the company is to strengthen its brand portfolio, reduce the number of brands by half and derive 75% of its net revenue from Growth and Specialist brands. Apart from this, the company is also investing in its blu e-vapour brand. The third-generation product, ‘blu MAX’, will be launched later this financial year and is expected to further improve the consumer vaping experience. The company remains on track to meet its target of saving £300 million annually by 2018, having already achieved £240 million at this point.

Consumer Goods

Reckitt Benckiser Group

The company’s recent acquisition of baby-food maker ‘Mead Johnson Nutrition’ for $16.6 billion would aid in spreading its footprint in various emerging markets, particularly China, which is poised to become its second-biggest market after the US. This takeover is in line with the company’s strategy to grow in consumer health business and add Powerbrands like ‘Enfamil’ to its portfolio. Mead Johnson’s infant and child nutrition business will boost the company’s revenues in consumer health by about 90%. The company projects Mead Johnson’s business to grow 3-5% annually in the medium to long term, led by demographic trends. Moreover, the merger would lead to cost savings of $200 million per annum by the end of the third full year.

Unilever Plc

The company recently turned down a $143 billion takeover offer from Kraft Heinz, citing differences in their business strategies. In its annual report, Chairman Marijn Dekkers announced a strategic review of the company’s operations to improve shareholder value and to avoid other unsolicited offers in future. It will cover a review of portfolio, organization, cost structure and balance sheet, and will be completed by early April. The company also upgraded its profit margin expectations for this year and now expects its core operating margin to be at the top end of its guidance of 40-80 basis points. Additionally, the CFO, Graeme Pitkethly, presented the company’s performance and goals at the Consumer Analyst Group of New York Conference 2017 on 24 February 2017.


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