Philip Morris buys e-cigarette maker Nicocigs as it warns of falling profits
Thursday 26 June 2014
Philip Morris has snapped up one of Britain’s fastest-growing electronic cigarette-makers, Nicocigs, as it warned profits from its traditional business will be lower than expected.
Nicocigs, was founded in 2008 and is based in Birmingham, is best known for its Nicolites brand.
Philip Morris, the owner of Marlboro, said the acquisition will give it “immediate access to, and a significant presence in, the growing e-vapour category in the UK market, as well as a strong retail presence”.
Nicocigs has about 27 per cent of the UK’s e-cigarette market, which has an estimated total retail value of $350 million (£206 million). The start-up employs 40 sales staff and distributes to 20,000 stores in Britain.
The purchase price for Nicocigs was undisclosed. The company reveals few financial details but it had amassed shareholder funds of £7.7 million by August 2013, according to Companies House. Nishil Nathwani, 27, is the leading shareholder.
The deal comes as Philip Morris, the world’s biggest tobacco firm, cut its profits forecast by about 4 per cent to between $4.87 and $4.97 per share on poor sales and price-cutting in Australia.
The stock fell nearly 2 per cent in trading on the German stock market. Chief executive André Calantzopoulos warned that the firm faces “significant currency headwinds … and known challenges in Asia”.
Calantzopoulos said the advent of e-cigarettes and other “reduced-risk” products means the tobacco industry is at “the early stage of a transformational process”.
Philip Morris reckons it could make $700 million of profit from “reduced-risk” products if it can reach a target of selling 30 billion units. But it also said it will run up $495 million in redundancy costs in September as it stops production in the Netherlands.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...