Year of transition
Switch of focus hits Inver House profits
In a year of transition, the results also reflect a major reorganisation of distribution arrangements in the key US market.
The company is investing in building stocks, completing expansion of the Speyburn Distillery, brand marketing and promotion.
Core brands have continued to perform strongly, with all four single malts – Old Pulteney, Speyburn, anCnoc and Balblair – showing growth in their focus markets with the exception of the US and Russia.
The former has been impacted by the change in distribution arrangements and the latter by a weak currency and depressed economic conditions.
The company’s super-premium small batch gin, Caorunn, which is made at Balmenach Distillery also reports a strong performance having grown to become one of the top selling gins in the Scottish and UK off trade, with a sales value increase of 65% on last year.
Managing director Graham Stevenson said: “Although our reported profits have fallen, our actual results are slightly ahead of expectations.”
- Turnover down 15.2% to £67.2 million, largely due to a reduction in sales of bulk whiskies
- Gross profit margins improved 3.2% to 37.7% as core brands continue to perform well
- Other operating expenses increased due to costs of changing distribution arrangements in the USA
- Operating Profit down 18% to £10.1 million
- Profit before tax down 19.5% to £9.5 million
- Excluding the US and Russia sales value of single malt brands were up 8.6%, with Old Pulteney up 6.6%, anCnoc up 8.6%, Speyburn up 9.7% and Balblair up 10%
- Caorunn Gin sales value up a superb +65%
- Continued investment in stocks for future brand growth – up 9% to £109m
- A return to a more normal level of capital expenditure of £3.7m (compared with £10.2m in 2014)