UK: Edrington profits flat, strong brand growth
The Edrington Group, the Scotch whisky producer, said today that in the 12 months ended 31st March, 2004, it had had seen a slight fall in turnover, reaching £224.9m compared to 2003 turnover of £225.9m. IT lead to a slight rise in operating profits of £65.1m (2003: £64.9m).
However, profit before tax increased by 17.3% to £72.4m and shareholders' earnings increased by 26.0% to £39.2m.
And, contributions from core brands were up 7%, after increased investment. The company singled out higher sales of The Famous Grouse and increased contributions from Cutty Sark, as well as strong performances from premium malts, The Macallan and Highland Park.
Ian Curle, chief executive, said: " During the year, the contribution from our core brands increased by 7% after increased investment behind their development. The Famous Grouse increased sales despite tough market conditions and our single malt whisky brands - The Macallan, Highland Park and The Glenrothes - performed ahead of the industry's growth in volume and value; this movement ahead reflects our strategic priority to increasingly premiumise our brands."
The Famous Grouse saw strong growth in the US and Greece, whilst the market in The Netherlands and France declined due to legislative changes. The UK remained the most important market for the brand, which continues to challenge for the No.1 position, the company said.
The Macallan was spurred on by significant growth in the US and Asia. This increase was driven by sales of older expressions of The Macallan and the successful introduction of the Fine & Rare range.
Edrington said that the opening of its Shanghai offices during the year reflected its growing optimism for the Asian region.
"From this base we are able to oversee the exciting developments in China, Taiwan, Japan and South Korea. We are optimistic about the long-term potential for our brands in this region."
However, Europe it said suffered from depressed economic conditions and some specific market situations driven by legislative changes. Within this overall dynamic southern Europe has been more positive for its brands, it said.
"In contrast to Europe, the US market for spirits was buoyant and provided an excellent market for all of our brands with The Macallan and The Famous Grouse growing steadily," Edrington said.
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