Costs of the rationalisation are expected to be pounds 123.8m. This exceptional charge helped to depress Rothmans' pre-tax profits from pounds 498.6m to pounds 343.6m for the year to 31 March, along with a pounds 31.2m bill to cover the cost of reconstructing the company last year into a pure tobacco manufacturer and Vendome, the luxury goods group.
Before exceptional charges Rothmans' pre-tax profits rose from pounds 470.7m to pounds 498.6m although this was almost entirely due to exchange rates, which added pounds 28m to profits.
Operating profits in Europe plunged by 23 per cent from pounds 129m to pounds 99.6m as sales slipped from pounds 1.08bn to pounds 1.04bn. Overall operating profits, helped by exchange gains, improved by 4.7 per cent to pounds 438.7m. The company is to pay a net dividend of 13.2p to its UK-based shareholders.
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