UK: Edrington hails healthy FY, despite exceptional drag

By | 10 July 2012

  • Net profits lift by 8.5% to GBP70.5m (US$109.6m) in 12 months to end of March
  • Net sales rise by 2.8% to GBP687.3m
  • Exceptional items skew performance, gain last year, loss this
  • Macallan brand grows profits by 40% globally
Edrington said its Macallan brand saw a 40% profit growth in the 2011 financial year

Edrington said its Macallan brand saw a 40% profit growth in the 2011 financial year

Edrington has posted a healthy set of numbers for its fiscal full-year, as emerging markets drove profits.

The company, which owns the Cutty Sark and Famous Grouse Scotch whisky brands, said on Tuesday (3 July) that net profits in the year to the end of March rose by 8.5% on the corresponding period a year earlier, reaching GBP70.5m (US$109.6m). Sales in the year, including Edrington's share of the Maxxium JV, were up by 2.8% at GBP687.3m.

After exceptional items, however, Edrington saw its net profits slip by 10% year-on-year, to GBP65.4m. In the previous fiscal year, the firm posted a GBP7.7m gain due mainly to the sale of the Glenrothes to Berry Brothers in February 2010. This year, meanwhile, a non-recurring loss of GBP5.1m was recorded as a result of “the one-off costs of establishing a Brugal branch in Spain and the cost of re-structuring the distribution entity in Spain”.

Operating profits were hampered by the exceptional items, inching up by 0.9% to GBP162.6m.

“Scotch whisky in particular is benefiting from years of investment in its iconic image and quality reputation,” said Edrington CEO Ian Curle. “Much of this growth is coming from the world’s emerging economies where the increasing middle class is driving the interest in premium international brands.”

The Macallan delivered strong growth, with the brand posting a profits leap of 40% year-on-year. Edrington said “moderate” growth for The Famous Grouse was held back by challenging conditions in mature European markets, although Highland Park enjoyed strong performances in the UK, US and Nordic markets.

Cutty Sark also faced difficulties in Southern Europe, the company said without giving details.

Edrington is a privately-held company and is not under obligation to disclose full company results. It is wholly-owned by charity The Robertson Trust.

The company said the salary paid to its highest-earning director dropped 13% in 2011 financial year to GBP846,000. The salary included bonus and benefits.

Yesterday, Edrington said it has signalled its intent to push growth in South-East Asia to complement success in China. It also said a move last year to take control of distribution in China and Hong Kong has paid off.

Expert analysis

Edrington Group in Spirits (World)

Facing challenging conditions in core markets, Edrington is under growing pressure to diversify its operations in terms of both product offer and geographic reach. This profile analyses the strongest opportunities for developing the company’s existing offer in both established and new markets, and considers the most attractive options for extending its reach into new categories.

Sectors: Company results, Spirits

Companies: Edrington, Famous Grouse, Cutty Sark, Maxxium, The Macallan, Highland Park

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