Blackwoods Gin success leads Blavod to predict profit next year

Blavod Wines and Spirits expects to become a profitable company by April next year, as its Blackwoods Gin and RedLeg Rum brands “show impressive growth”.

The redesign of Blackwoods Gin is expected to help Blavod Wines & Spirits make a profit by next year

The UK drinks group has been working over the past year to reduce costs that were “holding back development of its own premium brands”.

In the group’s five-month trading update to August 2013, Blavod claims to have reduced operating costs by 13%, including full redundancy costs, and financing costs by 59% to record a 58% increase in gross profit from its own brands.

“We have made significant changes to the company both in terms of changing the business model and rationalising the fixed costs that were holding back its progress,” said Don Goulding, executive chairman of Blavod. “This process is close to conclusion. At the same time we are beginning to see the benefits of developing our own brands, such as RedLeg and Blackwoods.”

Blavod acquired the Blackwoods Gin and Vodka, Jago Cream Liqueur and Diva Vodka brands in May this year, and has since embarked on a re-launch strategy in the UK.

Blackwoods 40% abv Gin was redesigned and re-launched in August 2013, while Blackwoods 60% Gin and 40% Vodka will be rolled out from October to stores such as Tesco, which will increase its distribution from 192 stores to 566 at the end of September.
Meanwhile, its RedLeg Spiced Rum has continued to show “impressive growth” in both the UK and overseas, particularly Australia where the brand secured listings with Woolworths and Dan Murphy stores.

Blavod is now also looking at redesigned the Jago’s and Diva brands, which will be reintroduced to the market “in the coming months”.

The refocus on its own brands has given Goulding a confidence boost for the coming year.

“The board remain focused on reaching profitability and the first step is to achieve monthly breakeven, this is targeted for the early part of next financial year,” he said.