Premium spirits company Edrington has reported growth in its Global Travel Retail division for the year ended 31 March 2016.
It said the business unit was strengthened by the addition of a new European Travel Retail unit, which replaced the company’s former joint venture with Beam Suntory, Maxxium Travel Retail.
Overall pre-tax profits at the company, before exceptional items, fell -13.2% to £146.4 million. Revenues were down slightly to £574.6 million, from £575.5 million in the previous 12 months. Profits after tax, but before exceptional items, were down by £7 million to £72.7 million.
The company said results were impacted by continued political and economic volatility, tough trading conditions in the mature markets of the UK and Taiwan, and the influence of currency exchange rates in emerging markets.
Edrington – whose brand portfolio includes The Macallan, Brugal, The Famous Grouse, Cutty Sark, Highland Park and Snow Leopard vodka – said it expected the uncertain political, economic, and trading conditions to continue throughout 2016-17.
However, Chief Executive Ian Curle said the company expected to see continued growth in Global Travel Retail in the year ahead.
Commenting on the overall results, he said: “During this year of transition we have faced challenging economic and trading conditions with strong performances in key markets and shortfalls in others. In combination with the influence of currency, this has adversely affected our results.
“Recent investment in distribution is showing benefits with the US, Global Travel Retail, and South East Asia delivering double figure growth. Edrington will continue to invest in its brands and in growing markets for premium spirits.”
Looking at the performance of Edrington’s brands, The Macallan achieved growth in both volume and value. However “intense competitive activity” dented volume and market share in Taiwan. Edrington noted particularly strong performances in China, Russia and the US, where the company said The Macallan was now the number one brand by value in the single malt category.
Highland Park showed “good momentum” across its major markets in Europe, the US and Canada while Brugal returned to profit growth in its core markets of the Dominican Republic and Spain. This was driven by a strategy of targeting priority markets and building brand equity through premium expressions.
The Famous Grouse maintained its leading position in the Scotch category in Scotland and the UK, Edrington said, “in the face of intense competitive pressure that reduced volumes”. The brand also grew in Spain and the US.
Cutty Sark volumes declined but the brand grew ahead of its category in Spain, Portugal and the US. Snow Leopard vodka showed positive volume growth during the year, with activity focused on key cities in Asia and the US, Edrington said.
