Edrington has reported lower annual revenue and earnings, amid “subdued” demand for the spirits giant’s pricier products.
However, the privately owned group booked a rise in underlying profits for the year to the end of March and pointed to the growth of its “core ranges”.
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The Scotch whisky and rum group said its statutory revenue fell 14% to £922.3m ($1.22bn) in the year ended 31 March
Core revenue, which Edrington said strips out currency effects and non-core activities, fell 3% to £855m.
The company said its statutory revenue fell more quickly “due to the impact of adverse currency rates versus the prior year together with a number of strategic decisions that affect our non-core revenue”, adding: “The most significant factor was the decision to cease distributing 3rd party brands in our UK distribution vehicle.”
Earnings before interest and tax (EBIT) dropped 24% to £226.6m. Before exceptional items, Edrington’s EBIT declined 10% to £283.1m.
Edrington said its profit for the financial year attributable to owner rose 5% to £120m.
However, on a pre-exceptional basis, profit attributable to Edrington shareholders fell 14% to £108m
The exceptional items Edrington recorded in the accounts included the gain on its sale of The Famous Grouse, a loss on the disposal of the Noble Oak brand, plus impairments related to Wyoming Whiskey and its investment in Lothian Distillers.
Last week, Edrington sold its 80% stake in Wyoming Whiskey to WW Partners, led by co-founder David DeFazio.
Edrington said softer demand for higher-priced expressions hurt its sales mix, even as some core lines held up better.
“Core revenue declined by 3% due to a negative product mix with strong growth in The Macallan 12-year-old being offset by lower volumes of higher-value prestige expressions,” it said.
Within the portfolio, The Macallan’s core range saw sales volumes rise 11%, supported by wider distribution and launches including The Macallan 110 in the US.
Elsewhere, sales of rum brand Brugal and The Glenrothes whisky grew, although Highland Park saw sales fall.
The company said its core revenue was up across Europe, the Middle East and Africa. It pointed to “notable” growth in China, Latin America and the Dominican Republic.
However, Edrington added that “a number of markets continued to be affected by de-stocking of our customers whilst the underlying consumption was more encouraging”.
The group said lower debt and improved working capital strengthened its balance sheet.
Net debt fell by £425m to £265m, while free cash flow increased 55% to £246.1m.
