Edrington profits down £7m

Edrington has announced profits of £72.7m for the year ended March 31, 2016, down £7m on the previous year.

Revenues of £574.6m were broadly in line with the previous year. The company says this reflects the adverse impact of both currency and intense competitor activity in Taiwan and the UK.

In its performance summary, it states; 

· “The company faced a challenging environment in 2015-16 and results were impacted by continued political and economic volatility, tough trading conditions in the mature markets of the UK and Taiwan, and the influence of currency exchange rates in emerging markets;

· “These uncertain political, economic, and trading conditions are likely to endure through 2016-17;
· “Given the strong performance by our brands in key markets we remain confident about the company’s medium and long term prospects, and will continue to invest and innovate to drive growth across our international business.”

The company said underpinning its strategy for growth it bought the remaining shareholding in Edrington Fix, to strengthen the company’s distribution in the growing markets of the Middle East, the Gulf, and North Africa.

It announced a new addition to The Macallan range. The Macallan Double Cask 12 Year Old is said to be a new take on the signature sherry oak style of The Macallan, which combines European and American oak. Double Cask has been launched in Taiwan and will be available to international markets and in the UK by the end of 2016.

Key developments included:

· Middle East presence increased as Edrington-Fix joint venture becomes wholly owned;
· Global Travel Retail business strengthened by new European Travel Retail unit.

Its brand summary said:

· “The Macallan delivered another strong year, building on its leadership and achieving growth in both volume and value. This was achieved despite a setback in Taiwan, where intense competitive activity dented volume and market share. However the brand performed particularly strongly in China, Russia and the USA, where it is now the number one brand by value in the single malt category.
· “Highland Park continued to show good momentum across its major markets in Europe, the USA and Canada, delivering increased value.
· “Brugal has now returned to profit growth in its core markets of the Dominican Republic and Spain, driven by its strategy of targeting priority markets and building brand equity through premium expressions.
· “The Famous Grouse maintained its leading position as Scotland’s and the UK’s favourite scotch in the face of intense competitive pressure that reduced volumes. The Famous Grouse grew in Spain and the US.
· “Cutty Sark was also subject to the same tough trading conditions in blended whisky. Although volumes declined relative to the prior year, the brand grew ahead of its category, in Spain, Portugal and the USA.
· “Snow Leopard vodka showed positive volume growth during the year, with activity focused on key cities in Asia and the US.”

Edrington chief executive Ian Curle (pictured) said: “A year on from the launch of Edrington’s new strategy, we see evidence that we have put the right strategy into effect, and that it is delivering results.
“During this year of transition we have faced challenging economic and trading conditions with strong performances in key markets and shortfalls in others. In combination with the influence of currency, this has adversely affected our results.

“Recent investment in distribution is showing benefits with the USA, Global Travel Retail, and South east Asia delivering double figure growth.

“Edrington will continue to invest in its brands and in growing markets for premium spirits. Our new distillery and brand home for The Macallan is taking shape in Speyside, and we look forward to welcoming visitors in spring 2018,” said Curle.