Pre-tax profits at tobacco firm PJ Carroll last year increased by 52% to €5m as the business benefited from an increase in sales from its portfolio of vape products.
New accounts show that PJ Carroll & Co Ltd recorded the sharp increase in pre-tax profits as net revenues increased by 6% from €26.85m to €28.48m.
The directors confirmed that “Vapour” products accounted for 24% of revenues last year which equate to sales of €6.83m.
On the risks and uncertainties facing the business, the directors point to “potential flavour bans in vapour products and further menthol ban regulation that could negatively impact the company’s business”.
Legislation to ban vaping products to under 18s is currently before the Oireachtas.
A subsidiary of British American Tobacco, PJ Carroll Ltd’s gross revenues, including of excise duties and other taxes of €166.29m, totalled €194.77m for the year.
According to the directors, the revenue increase “was driven by price increase in combustible products as well as by an increase in revenue from Vapour products”.
The directors state that “combustible products delivered 76% of revenue while remaining is coming from Vapour”.
They state that sales of “combustible products” declined in 2022 by 14% in line with industry decline.
The firm paid out an interim dividend of €6.98m last year. The profits take account of non-cash depreciation costs of €788,000.
The directors state that the “black market” remains a huge challenge facing the business and has more than doubled from 13.8% in 2020 and 30% last year.
They state that out of 30% illicit cigarettes, 17% are classified as illegal and 13% as non-Irish duty paid.
The directors state that the “increase was partially driven by the rise in non-Irish duty paid cigarettes as a result of UK Brexit”.
On the risks facing the business, the directors state “the net effect on the legal market of repeated excise increases, sustained level of illicit trade and the introduction of stringent regulatory measures such as already implemented standardised packaging has been an accelerated decline in legitimate cigarettes sales and growth in roll-your-own volume”.
Last year, the Revenue Commissioners seized 51.6 million cigarettes valued at €39.5m and 11,803kgs of tobacco with an estimated value of €8.5m.
Numbers employed by PJ Carroll Ltd last year remained at 21 and staff costs declined from €2.17m to €1.92m. The firm recorded a post tax profit of €4.2m after incurring a corporation tax charge of €783,000.
On contingent liabilities facing the company, a note states that at the end of December 2022, two plaintiffs have product liability cases against the firm here.
The note states that PJ Carroll & Company Limited “intends to defend all the claims vigorously and has available to it substantial defences both on the law and the facts”.
Accumulated profits at the end of last year totalled €39.12m.