Profits Quadruple at Cigarette Firm Gallaher

Source from:  19 August 2007 By Samantha McCaughren, Business Correspondent  08/20/2007

Profits at Irish cigarette company Gallaher quadrupled last year to almost €42 million, as the demand for tobacco products grew. While profits were boosted by higher revenues, the figures were affected by an €11million dividend received in 2006. Costs were higher the previous year, due in part to redundancy and restructuring costs of €4 million. Despite the smoking ban and other initiatives introduced by the government to discourage smoking, Gallaher said the market increased by 0.2 per cent in 2006. In 2004, when the smoking ban was introduced, the company reported a fall in sales of 12 per cent. The company sells almost half of all cigarettes purchased in the Irish market. Gallaher's Benson & Hedges King brand strengthened its position as the best-selling brand in Ireland, accounting for 21 per cent of all cigarettes sold in the Republic. Gallaher and other cigarette companies had been challenging parts of the government's clampdown on tobacco but dropped their legal proceedings in January. The company had a turnover of almost €694 million, up from €677 million in 2005. Its operating profit was €56 million, up from €40 million. The company paid €9.5million in taxes. At the end of 2006, shareholders' funds totalled €231 million. The company employs 81p eople. During the year, wages fell from €7.2 million to €6.4 million. Gallaher and several other tobacco companies are involved in actions in Ireland in which people are seeking damages for ailments they claim are related to tobacco. Gallaher said these claims would be vigorously contested. "Regardless of the outcome of the pending litigation, the costs of defending these claims could be substantial, and will not be fully recoverable from unsuccessful plaintiffs," the accounts stated. In 2003,Gallaher focused its customer service, sales, marketing, finance and human resource functions in Tallaght, Dublin 24, and moved production to Lisnafillan in the North. The parent company is based in Britain.The Irish operation dates back to 1857, when Tom Gallaher started a business making Irish roll tobacco in Derry. The Gallaher group is the fifth-largest international tobacco company in the world, and the fourth-biggest in Europe, based on billions of cigarettes sold each year. Enditem