UK: Edrington posts full-year loss after Brugal write-down
- FY net losses fall to GBP90.4m from GBP65.4m profit last year
- Net sales up by 1.6% to GBP698.5m
- Operating losses fall to GBP95.5m from GBP150.8m profit last year
- Brugal brand written down by GBP274.8m
- Chairman Ian Good to step down
Edrington has hailed a strong full-year performance despite a GBP274.8m (US$418.4m) write-down of its Brugal rum brand that pushed profits into the red.
Net losses in the year to the end of March came in at GBP90.4m after a GBP65.4m profit in the corresponding period a year ago, the Scottish company said today (1 July). Net sales were up by 1.6% to $698.5m over the same period while operating losses were GBP95.5m from a GBP150.8m profit last year.
Edrington blamed the losses on a one-off revaluation of its Brugal brand after poor performance in southern Europe, caused by the region's economic downturn. Edrington acquired a majority stake in Dominican Republic-based The Brugal Company in 2008, which has a big presence in Spain.
“Our plan for Brugal has been buffeted by the enduring economic depression in southern Europe but our confidence in the brand is reflected in our continued investment behind it,” said Edrington chairman Ian Good, who was revealed today to be stepping down this month.
Despite the write-down, Brugal grew its sales value in the US by 22% over the past 12 months, with “significant growth” in New York, Boston and Chicago, Edrington said.
Scotch sales were strong, with The Macallan growing its worldwide sales by about 40% in the past five years and Famous Grouse becoming the number one Scotch brand by value and volume in the UK and the fourth-largest standard Scotch brand in the world, Edrington said.
“Edrington has delivered another record year of trading,” CEO Ian Curle said. “In the face of challenging economic conditions in southern Europe, our overall strength in both established and emerging markets has resulted in an increase in our turnover, profit and dividend.”
This year's sales increase matched last year, when sales rose by 2.8%.
Good, who has been with the company for 40 years, will step down from the chairman role at Edrington's AGM on 30 July, a spokesperson told just-drinks. He will be replaced by Norman Murray, a non-executive board member since April last year. Murray is chairman of Petrofac and a senior non-executive at Greene King, the spokesperson said.
To read the company's official statement, click here.
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