Edrington predicts ‘significant’ sales decline in 2020/21
The Macallan maker Edrington reported a 6% increase in revenue for the year ending 31 March 2020, however the firm anticipates a “significant” decline in sales and profits in 2020/21.
Revenue for the 12-month period rose to £699.6 million (US$860m). Profit before tax for the year increased by 10% to £22.4m (US$27.5m).
Scott McCroskie, chief executive, said: “Edrington had a highly successful year in 2019/20. A 6% year-on-year increase in core revenue and a 13% rise in core contribution marks four consecutive years of profit growth and validates the consistent long-term investment in our brands and our focus on strengthening critical business capabilities.”
The Scottish group said its leading brand, single malt The Macallan, witnessed “another outstanding year”.
The company’s other single malts, Highland Park and The Glenrothes, had a “mixed year” in a competitive category, the group said.
Blended malt whisky The Naked Grouse continued to attract new and existing consumers in a contemporary whisky category.
The Famous Grouse brand also secured its position as the UK’s leading whisky, however the blended Scotch category faces continued declines, Edrington said.
Brugal rum, meanwhile, experienced “exceptional growth” in its home market, the Dominican Republic. The brand also focused on key cities across the world.
McCroskie said the firm recognises that its financial results “largely reflect a pre-coronavirus world”.
He said: “While our business is on a sound financial footing, we do not underestimate the challenges we will continue to face as we navigate the crisis and emerge into an uncertain new environment.
“We anticipate a significant decline in global sales and profits in 2020/21. Our immediate response has been to minimise cash outflow and control costs. We will continue to manage the business prudently whilst we adapt rapidly to our new situation and seek to capitalise on emerging opportunities.
“I believe the business is well-equipped to respond to changes in both consumer preferences and the channels through which spirits are sold. Fundamentally, our capabilities are strong, and our brands are in good health and remain desirable to consumers.”
During the group’s fiscal year, Japanese spirits giant Suntory acquired a 10% stake in Edrington for an undisclosed sum.
Edrington also closed its Korea operations at the end of March this year.
The group’s travel retail business in the Americas ceased distribution of third-party spirits from Illva Saronno, Sazerac and Tito’s Handmade Vodka last year.
In June 2019, the inaugural Macallan Boutique opened at Dubai International Airport as part of a new multi-million-pound global investment from the Scotch whisky brand. The Macallan relaunched its boutique at Taiwan Taoyuan International Airport in November.