Edrington full-year profits up by a thirdBy Annie Hayes
The Macallan Scotch whisky producer Edrington saw its full-year profits soar by 32% to hit £91 million in 2016/17, reflecting the impact of the fall in value of sterling.
Total revenues in the year ending 31 March 2017, excluding the impact of currency and trade sales, grew by 6% to reach £668.1m.
Now in its third year Edrington’s 2020 Strategy – Perfect The Macallan, Accelerate Highland Park, Develop Super-Premium, Optimise Regional Power Brands, and Focus for Success – also positively impacted results.
In 2016/17 the strategy was supported with higher levels of investment in brand advertising and promotion, increased innovation, contributing to “an encouraging performance”.
The Macallan enjoyed a “strong” year of sales volume and revenue growth, with an increase in brand-building investment.
At the beginning of June, Edrington purchased World Equity Brand Builders’s stake in the pair’s Edrington WEBB Travel Retail Americas joint venture for an undisclosed sum. Work is progressing on The Macallan’s new £100 million distillery in Speyside, which is slated for completion later this year.
Edrington’s portfolio of premium brands responded to an 18% increase in brand investment, and was “strengthened” by the return of The Glenrothes single malt Scotch whisky, which was bought back from Berry Bros & Rudd after seven years of ownership.
The group’s Regional Power Brands experienced a “strong” year of growth, led by Brugal. The rum brand’s premium focus resulted in “significant volume and profit growth” in its core markets of the Dominican Republic and Spain.
The Famous Grouse “strengthened its leading position” in the UK, delivering its “highest-ever” market share, while Cutty Sark performed well in Spain and helped to grow overall profit.
“2016-17 was a significant year of growth for Edrington despite a difficult backdrop of economic and political volatility, and a fiercely competitive marketplace,” said Ian Curle, chief executive, Edrington.
“Since its introduction in 2015 our strategy has gained momentum and positively impacted results. Higher levels of investment in brand marketing, increased innovation, and greater focus on consumers have led to an encouraging performance.
“Despite short term uncertainty we are confident about the medium and long term prospects for the business. With its premium brand portfolio, proven strategy, and management capability, Edrington has established the necessary momentum to deliver further growth.”