Turnover steady but profits dip slightly at Inver House Distillers as brand investment grows

July 5th, 2018 | Posted in: Whisky

Airdrie-based Inver House Distillers Ltd, the Scotch whisky subsidiary of International Beverage Holdings Ltd, saw turnover hit £62.7m for the year to September 2017, with gross profit dipping slightly to £22.9m (a 1% decrease over last year) and operating profit down by 2.8% to £7.6m. 

Martin Leonard, Inver House Distillers’ Managing Director commented, These results are as we expected and show that the business is in a strong position and delivering on our long-term strategy to build on our highly successful brands in global markets. We are also committed to investment programmes at our distilleries, to ensure they are in good shape to deliver increased demand for stock in the future, where possible using the latest green technology and processes to protect the environment surrounding each site.

In terms of our brands, Caorunn is a very good example of our strategy in action. A 47% growth figure in the UK market demonstrates how our production, sales and marketing skills and long-term approach can build a brand to become one of the UK’s best sellers in what is an extremely competitive sector. We are investing heavily in supporting our brand portfolio to compete in the global market, with a recent relaunch for Speyburn in the UK and US, and further brand projects planned in the near future. Our spirits also continue to be recognised with ‘best in class’ medals at some of the world’s top drinks industry competitions, and they continue to grow despite difficult trading conditions and general uncertainty in the marketplace’.

The results reflect the Airdrie-based Company’s continued investment in stock for future sales (up 3% from last year) and support for the global growth of its award-winning premium spirits portfolio – with a solid performance in core markets for single malt Scotch whisky brands Old Pulteney, Speyburn, anCnoc and Balblair, plus the premium blended Scotch Hankey Bannister.

The Company also continues to invest in its distilleries, most notably a £3 million green initiative at Balmenach Distillery, the home of Caorunn Gin, to install a new anaerobic digestion system to significantly reduce the site’s carbon footprint.

The financial results in summary:

  • Turnover at £62.7 million was at a similar level to the prior period.

  • Gross profit margins were slightly down on the prior period at 36.6%, core brands making up a larger % of the sales.

  • Other operating expenses increased as more monies were invested behind promoting the brands.

  • Operating Profit at 12.2% reflects investment behind brands reducing profits in current year.

  • Profit before tax at 11.5% down on the prior year percentage of 14.1%.

  • Caorunn Gin sales continue to grow at double-digit level.

  • Continued investment in stocks for future brand growth – up 3% to £118m.

2017 key financial information for the Year

2017 (12 Months)

2016

(9 Months)

 

£000

%

£000

%

Sales

62,705

47,989

Cost of sales

-39,743

-29,959

Gross profit

22,962

36.6%

18,030

37.6%%

Other operating expenses

-15,292

-24.4%

-10,831

-22.6%%

Operating profit

7,670

12.2%

7,199

15.0%%

Interest

-470

-0.7%

-451

-0.9%%

Profit before tax

7,200

11.5%

6,748

14.1%%

Tax

-1,496

-2.4%

-1,403

-2.9%%

Profit after tax

5,704

9.1%

5,345

11.1%%


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