In the begging letter attached to the Grauniad article, they claim: "This is what we're up against, bad actors spreading disinformation on the Internet". They lack even the self-awareness of an amoeba.
Being an accountant I couldn’t resist rising to the challenge of trying to see what Gilmore is doing.
The report you cite, Chris, goes back some way, using data gathered from the 5 years from 2009-13. So I’ve looked at the Accounts of Imperial Tobacco for 2013 to try see what she’s doing.
Firstly, I think that Tim is quoting the Accounts of the worldwide group Imperial Brands PLC. However, I believe that Gilmore is using the Accounts of Imperial Tobacco Ltd (company number 01860181) which is the group whose activity comprises the tobacco business. While I can’t see what adjustments she is making the numbers she quotes for Revenue and Adjusted Profit are close enough to the numbers in the Accounts for Turnover (excluding Duty) and Operating Profit, with a ratio of about 67%, to conclude that this is probably what she is basing her calculations on. She disregards Financing Costs, which would reduce the margin to about 42%.
If I am correct, then looking at the 2023 Accounts of Imperial Tobacco Ltd, rather than Imperial Brands PLC, the margin on sales (excluding duty) would be 57% (excluding restructuring costs) before Financing Costs, and 35% afterwards. So the margins have shrunk in the past decade but are still high.
To get to the bottom of this and reach a firm conclusion one needs to understand the nature of the vast difference between the figures quoted for Turnover in the respective Accounts of the two companies. But on the face of it you can see, roughly, where Gilmore is coming from.
Anyway, those are my conclusions based on a quick review of the Accounts.
That was also my initial first thought. However the Accounts of Imperial Tobacco Limited state that it is the holding company for the “majority of the operating subsidiaries of Imperial Brands PLC”. And if you look at the note detailing the subsidiaries consolidated in these accounts it lists pages and pages of companies from every point of the globe.
So on the face of it this isn’t the explanation for the very different numbers.
However if it were the explanation and the numbers in these Accounts did only represent the U.K. as you surmise, this would tend to support Gilmore since her interest is presumably only the U.K. Or certainly only the U.K. when it comes to advocating Reeves to impose more taxes.
In the begging letter attached to the Grauniad article, they claim: "This is what we're up against, bad actors spreading disinformation on the Internet". They lack even the self-awareness of an amoeba.
The 66% figure comes from Anna Gilmore of Bath University who is a notorious dolt. https://purehost.bath.ac.uk/ws/portalfiles/portal/128455728/The_extreme_profitability_of_the_UK_tobacco_market_and_levy_V4.6_final.pdf Her source was "various Imperial Tobacco annual reports and author’s calculation".
Being an accountant I couldn’t resist rising to the challenge of trying to see what Gilmore is doing.
The report you cite, Chris, goes back some way, using data gathered from the 5 years from 2009-13. So I’ve looked at the Accounts of Imperial Tobacco for 2013 to try see what she’s doing.
Firstly, I think that Tim is quoting the Accounts of the worldwide group Imperial Brands PLC. However, I believe that Gilmore is using the Accounts of Imperial Tobacco Ltd (company number 01860181) which is the group whose activity comprises the tobacco business. While I can’t see what adjustments she is making the numbers she quotes for Revenue and Adjusted Profit are close enough to the numbers in the Accounts for Turnover (excluding Duty) and Operating Profit, with a ratio of about 67%, to conclude that this is probably what she is basing her calculations on. She disregards Financing Costs, which would reduce the margin to about 42%.
If I am correct, then looking at the 2023 Accounts of Imperial Tobacco Ltd, rather than Imperial Brands PLC, the margin on sales (excluding duty) would be 57% (excluding restructuring costs) before Financing Costs, and 35% afterwards. So the margins have shrunk in the past decade but are still high.
To get to the bottom of this and reach a firm conclusion one needs to understand the nature of the vast difference between the figures quoted for Turnover in the respective Accounts of the two companies. But on the face of it you can see, roughly, where Gilmore is coming from.
Anyway, those are my conclusions based on a quick review of the Accounts.
The difference, I think, is that Tim's figures are for global sales whereas as Gilmore says she's using UK sales.
That was also my initial first thought. However the Accounts of Imperial Tobacco Limited state that it is the holding company for the “majority of the operating subsidiaries of Imperial Brands PLC”. And if you look at the note detailing the subsidiaries consolidated in these accounts it lists pages and pages of companies from every point of the globe.
So on the face of it this isn’t the explanation for the very different numbers.
However if it were the explanation and the numbers in these Accounts did only represent the U.K. as you surmise, this would tend to support Gilmore since her interest is presumably only the U.K. Or certainly only the U.K. when it comes to advocating Reeves to impose more taxes.
I suppose next time I'm home (which is at the bottom of the hill the uni is on) I should really try to track her down.
Axe or pickaxe?
Mattock.
Chainsaw also good