Introduction: Velo’s Strong Growth Amidst Industry Challenges
The Irish subsidiary of British American Tobacco. PJ Carroll & Co Ltd disclosed that its Velo nicotine pouches saw a nearly five-fold increase in sales to 29 million units in 2024, driving an 11% year-on-year growth in the company’s net revenue to 33.75 million euros. However, despite this growth, high tax burdens and a decline in traditional cigarette sales led to a drop in pre-tax profit by 8%, to 56.9 million euros.
Record Growth in Velo Nicotine Pouch Sales
The sales volume of Velo nicotine pouches skyrocketed from 6 million pouches in 2023 to 29 million pouches in 2024, marking a 442% increase in related revenue. This surge contributed significantly to the company’s performance, although the product was only launched in Ireland in June 2023, contributing just 3% of revenue in that year. By 2024, Velo’s market share had grown to 45.9%.
Revenue Growth and Factors Behind the Success
PJ Carroll’s net revenue increased by 11% from 30.53 million euros in 2023 to 33.75 million euros in 2024. This boost was primarily attributed to the strong growth of the Velo brand and the continued expansion of its vape business, which partially offset the decline in traditional cigarette sales.
Impact of High Tax Burdens on Gross Revenue
The company’s total gross revenue for 2024 was 179.43 million euros, with approximately 145.67 million euros being consumed by taxes and other fees. This highlights the significant tax burden faced by tobacco and nicotine products in the Irish market.
Pre-Tax Profit Declines Despite Growth
Despite the increase in revenue, PJ Carroll & Co Ltd’s pre-tax profit declined by 8%, dropping to 5.69 million euros. The company did not provide specific details regarding the exact cost components behind the profit decline, only noting that taxes and market changes were factors exerting pressure on profitability.
Regulatory Changes and Potential Impact on Future Sales
The rapid growth of Velo occurred amid tightening regulations from the Irish government. New legislation is in the works to prohibit the sale of nicotine products, including nicotine pouches, to minors and to impose strict restrictions on their advertising and display in retail outlets.
Nicotine Use Among the Irish Population
According to the “Healthy Ireland” survey released this year, approximately 1% of the Irish population reported using nicotine pouches. The usage rate is higher among the 15 to 24 age group, with males using the product more frequently than females.
Human Resources and Employee Compensation in 2024
PJ Carroll & Co Ltd plans to hire 22 new employees in 2024, with a total annual employee compensation amounting to 1.3 million euros. Additionally, the combined director compensation for the company totals 204,000 euros.
