PJ Carroll profits fall to €4.8m

TOBACCO firm PJ Carroll saw its pre-tax profits plunge from €10.1m to €4.8m last year as the number of cigarettes smoked in Ireland fell to 4.5 billion from 5.1bn.

The Dublin-headquartered company, which is owned by British American Tobacco, said the total market volume decline of cigarettes was 11.6% last year and the decline was primarily due to the growth in illicit trade.

PJ Carroll, which has a market share of 15.5% lags behind Gallahers and Imperial Tobacco, which hold about 75%.

In addition to the Carrolls brand, it also distributes Rothmans, Major, Kent, Dunhill and Lucky Strike.

Trading profit was €7m in 2009 against €10.8m in 2008.

The company said that this was caused mainly as a result of an overall volume decline of 895m cigarettes.

Revenue in the year was down from €223.8m to €217.8m, according to the accounts of PJ Carroll & Company Limited.

Exceptional costs provided for in 2009 were €1.2mrelating to company restructuring costs.

The risks facing the company are the product liability cases outstanding against the company and the Irish Government’s legislative programme directed at reducing the consumption of tobacco in Ireland.

Dividends amounting to €8.5m were paid out during the year.

Employee costs increased from €5.5m to €5.6m last year.

PJ Carroll says it is facing 15 cases in the courts from smokers and their families and there are 20 against the industry as a whole in Ireland.

“If despite the defences available to PJ Carroll & Company Limited there were to be adverse final judgements, such developments could materially affect the results of operations or cash flow of the group.

“However, PJ Carroll & Company Limited intends to defend all the claims vigorously…

“If adverse judgment were entered against PJ Carroll & Company Limited in the first instance, a right of appeal would exist,” the accounts read.

It said that since the amount of damages claimed has not been specified it is not possible to determine the total amount of the claims pending but added that the aggregate amounts involved in such litigation are potentially significant.

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