Berry Bros. reports £4.2m operating profit loss

Wine and spirits merchant Berry Bros. & Rudd has reported full-year financial results that are “well below expectations”, with an operating profit loss of £4.2m in 2014/15.

Berry Bros. & Rudd has reported an operating loss of £4.2m in 2014/15

Turnover also fell 5.1% to £142 million in the year to 31 March 2015.

Chairman of the company Simon Berry said the operating loss was “largely due to an imbalance between the operating costs of the business and growth in sales”.

He also cited “slower than expected” business in Asia as contributing to the decline, with “more work to do” on creating the “appropriate business model” in the Far East.

“Nevertheless, the fundamentals of our business remain strong and we have made a number of important strides this year which confirm we are indeed on the right track,” he said.

In August this year, Berry Bros. & Rudd appointed former Tesco wine director Dan Jago as its new chief executive officer. Jago officially stepped into the role in October.

“We now have a new leadership structure that makes better use of the talent we have across the management team and more fully integrate members of the family into the business,” continued Berry.

“We are confident that the changes we have made will enable us to maximise our strategic potential, realise future commercial opportunities and take the necessary operational and financial steps to deliver our objectives.

“The board is fully committed to these objectives and the process of change in line with our overall long term strategy will continue.”

In 2010, the firm implemented a five-year development programme to “ensure continued growth” following the sale of its blended Scotch whisky brand Cutty Sark to Edrington. Berry Bros. conducted a business review this year that confirmed it is “on-track for the long-term growth of the business”.

Despite its disappointing operating loss in 2014/15, the group’s spirits business performed “ahead of expectations”, with The Glenrothes Scotch No.3 Gin, King’s Ginger liqueur and other own label brands boosting volume sales and gross profits.

The group also noted “improved performance” from Pink Pigeon rum and The Indian Ocean Rum Company.

Berry Bros. is continuing to take legal steps to “recover substantial sums” from a former distributor in Hong Kong, which has involved “necessary exceptional costs”.

“Throughout the group, at home and abroad, our team have once again worked extremely hard and have made substantial contributions to the business,” said Berry. “I am confident that these efforts will continue. I look forward to working together over the next year in a business with a clearly defined strategic direction and even brighter future.”