Tobacco and vape company John Player & Sons saw earnings fall by almost a quarter last year as the overall cigarette market in Ireland declined by nearly 13 per cent following a similarly steep contraction the year before.
Accounts for the company, which is an Irish subsidiary of Bristol-headquartered Imperial Brands, show the group made a profit of €10.4 million for the year ended September 30th, 2024, down from €13.7 million in 2023.
Brands in the Imperial group include John Player cigarettes, Cohiba cigars and Rizla rolling papers. The group also launched its vape brand Blu on the Irish market in 2019.
Revenue at the group rose to €57.9 million in 2024 from €55.5 million the year before. A dividend of €2 per share was paid out, amounting to €10 million, which was down from €8 per share amounting to €40 million the year before.
The company said the total legal cigarette market in Ireland declined by 12.8 per cent last year following a decline of 14 per cent the year before. The non-Irish duty paid sector increased to 34 per cent.
“Adding to this challenge, consumers are moving to value brands at an increasing pace as the result of the total tobacco market profit pool is shrinking,” the directors of the company said in a note attached to the accounts.
The company’s bottom line was further hit by an expense of €5.1 million relating to the settlement of certain deferred members in the pension scheme during the year.
This removed more than 70 per cent of liabilities from the scheme. The company said it expects to make no contributions to the defined benefit scheme during the next financial year.
The balance sheet shows total equity shareholder’s funds of €72.4 million, which was down from €73.6 million.
John Player & Sons said the current economic conditions “continue to create uncertainty”, particularly over the level of demand for the company’s products.
“The key risk and uncertainties facing the company relate to market demand for the products and the continued management of its cost base along with the general economic climate in which the company operates,” it said.
Selling and administrative expenses more than doubled in the year from €5.6 million to €13.4 million. The company’s manufacturing costs rose 4 per cent, while supply chain costs also increased.
Looking ahead, the company said it may have to contribute to the cost of setting up and funding a “responsibility scheme” for vape products. The directors also expect “significant regulatory changes” to be implemented over the coming years, impacting costs and profit.
Some short-term financing was in place during the year and has since been repaid. The company does not have any external debt.
The company is currently involved in a number of legal cases, in which claimants are seeking damages for alleged smoking-related health effects, all of which are being “vigorously contested”.
The average number of people employed by the company during the year was 40, down one person. Staff costs soared from €3.3 million to €8.2 million due to the pension scheme.
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