Edward Dillon & Co, the drinks distributor in which Diageo recently sold its stake, saw costs and expenses eat into profits last year.
Accounts filed at the Companies Office for the Dublin-based firm show that pretax profits fell from €8.2 million in 2003 to €6.6 million in the year ending September 30th last.
The fall came despite reasonably strong sales, which rose from €129.5 million to €136.8 million over the same period.
The cost of sales climbed by 6 per cent to €116 million, while operating expenses were 8.5 per cent higher at €14.7 million.
Operating profits fell from €8.1 million to €6.6 million over the year.
Higher dividend payments meanwhile resulted in Edward Dillon retaining a loss of €1.5 million for 2004, compared to a retained profit of slightly more than €1 million at the same point of 2003. Dividends proposed and paid amounted to €7.4 million in 2004, compared to €6 million in the previous year.
The company's profit and loss account was also hit by a €3.9 million deduction linked by an overhaul in Edward Dillon's share capital in 2004.
The firm's distributable reserves were cut by €3.9 million after a batch of ordinary shares were redeemed and cancelled. The share capital was then redesignated into A, B and C shares and a further batch of C shares was issued. The accounts show that this new issue led to a €61,000 addition to share capital and a €1.4 million boost to share premium.
These changes resulted in the €6 million Edward Dillon had in its profit and loss account at the end of 2003 being reduced to €560,000 at the end of the firm's most recent financial year.
Diageo owned a portion of Edward Dillon in conjunction with Bacardi, Brown Forman and Moët Hennessy until last September. These three fellow shareholders took up Diageo's stake at the time of the company's exit.
Diageo's departure led to the termination of a distribution deal with Edward Dillon for products including Gordon's Gin and Black & White whiskey. Edward Dillon has meanwhile entered into a long-term agency agreement with Hennessy.
