Tobacco and vape producer John Player sees profits rise 18% in spite of steep decline in Irish cigarette market

Tobacco and vape products manufacturer John Player & Sons (JP&S) saw profits from its Irish sales rise by 18 per cent to almost €16 million last year, despite the total cigarette market in the Republic declining by 14 per cent.

Accounts for John Player & Sons Ltd, an Irish subsidiary of Bristol-headquartered Imperial Brands plc, show that revenues grew to €55.5 million in the year to September 30th, 2023. This compared with revenues of €53.2 million in 2022.

Revenues account for sales of tobacco and vape products in the Republic. The company did not provide a breakdown of sales for each kind of product.

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.

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JP&S reported an operating profit of €15.95 million in 2023, up from €13.56 million the previous year. The company’s profit after tax was €13.66 million, an increase on €11.96 million in 2022.

The Irish subsidiary declared a dividend to its parent entity of €8 per share, amounting to €40 million paid out during the financial year. It did not pay a dividend in 2022.

A directors’ report accompanying the accounts noted that the total legal cigarette market in Ireland declined by 14 per cent in 2023 (compared to a decrease of 15 per cent in 2022) – although they added that the non-Irish duty paid (NIDP) sector has stabilised.

The company said the key risks and uncertainties for the business relate to market demand for its products, continued management of its cost base, and the general economic climate. It noted that its manufacturing costs have risen by 18 per cent, and supply chain costs have also increased.

Directors also noted that the company may have to contribute to the cost of setting up and funding an extended producer responsibility scheme for vape products in 2024.

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In addition, the directors said they expect “significant regulatory changes” to be implemented in the coming years for both tobacco and vape products.

“Whilst we expect that these developments could potentially impact our costs and profitability going forward, they will not be at a level that would impact our going concern assessment,” they said.

The company’s staff costs fell from €7.14 million in 2022 to €3.28 million in 2023, mainly due to the restructuring of pension liabilities between JP&S and fellow subsidiary Imperial Brands Mullingar (which was wound up in 2019). Retirement benefit costs for JP&S fell from €4.8 million in 2022 to €619,000 in 2023.

Overall directors said that the company’s balance sheet shows a “positive financial position”, with total equity shareholder’s funds of €73.6 million at the end of the financial year. This was down from €103.04 million in 2022.

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