US: Castle Brands wine withdrawal hampers FY

By | 2 July 2013

  • FY net losses worsen, hitting US$6.2m from $5.9m a year earlier
  • Net sales in 12 months to end of March jump by 16.9% to $41.4m
  • Operating losses also deteriorate: $4.4m versus $3.9m
  • Castle steps back from wine, takes $1.7m hit
Castle Brands saw losses widen in its latest fiscal year

Castle Brands saw losses widen in its latest fiscal year

Castle Brands has seen its decision to reduce support for its wine brands hit the bottom line in its full year, despite a healthy rise in sales.

The company said earlier today (2 July) that net losses in the 12 months to the end of March came in at US$6.2m, versus $5.9m a year earlier. Net sales in the period performed well, however, rising by 16.9% to $41.4m, but operating losses came in at $4.4m compared to $3.9m last year.

The losses marked a return to two years ago for Castle Brands: In fiscal 2011, net losses totalled $6.3m.

In the last four months of the company's fiscal year, net losses totalled $3.3m compared to $1.5m, because of a $1.7m loss on its wine assets. Castle said that it has looked to "reduce its sales and marketing efforts on its wine brands". Net sales in Q4 rose by 8% to $10.8m, as operating losses more than doubled - $2.7m against $952,000 a year earlier.

For the full year, Castle saw total volumes rise by 11.6% to 372,059 cases, and highlighted "strong growth" for the Jefferson's Bourbons and rye whiskies in the period. Gosling's Black Seal Rum exceeded 100,000 cases sold in the US in the 12-month period.

To read the company's official announcement, click here.

Expert analysis

Castle Brands Inc. (ROX) - Financial and Strategic SWOT Analysis Review

Castle Brands Inc. (Castle) is a company that operates in alcohol industry. It undertakes the development and global marketing of premium branded spirits in rum, whiskey, liqueurs, vodka, tequila and wine categories. The company’s premium spirit brands include Betts & Scholl, Tequila Tierras, Brady´s Irish Cream, Gozio Amaretto, Travis Hasse's Original Pie Liqueurs, Celtic Crossing Liqueur, Clontarf Irish Whiskey, Knappogue Castle Whiskey, Boru Vodka, Gosling's Rum, Jefferson's and Pallini Liqueurs. Castle distributes its products in US states and the District of Columbia; in international markets such as Ireland, Great Britain, Northern Ireland, Germany, Canada, France, Italy, Sweden and the Duty Free markets; and in a number of other countries in continental Europe. It is headquartered in New York, the US.

Sectors: Company results, Spirits

Companies: Castle

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