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Bruichladdich reveals seven per cent sales hike for new owners

BRUICHLADDICH Distillery has hiked turnover by seven per cent to £11.1 million as its French owner Remy Cointreau invested heavily to increase bulk whisky stocks.

The first full year of accounts to be posted by the Islay distillery under Remy signal the Paris-based company's long-term confidence in the business it acquired for £58 million in July 2012.

The figures became available on the day Remy said Bruichladdich sales had doubled in the first quarter of its financial year, between April and June. It said the strategy implemented for the distillery two years ago has started to bear fruit.

Bruichladdich's latest accounts show Remy hiked investment in distilled bulk whisky stocks at Bruichladdich to £18.1 million in the year ended March 31.

Investment in stocks had been £15.8 million the year before.

The results reveal Bruichladdich turned a pre-tax loss of £471,761 for the 15 months ended March 31, 2013 into earnings of £162,052 last year.

But the firm's previous accounts included exceptional items of £1 million, largely related to the distiller's acquisition by Remy.These included director and company sales bonuses of £468,078.

Before exceptional items, Bruichladdich booked earnings before interest, tax and depreciation (EBITDA) of £795,313 last year, compared with £1.57 million in the prior, 15-month period.

The move by Remy to step up the level of whisky it is laying down for the future reflects the industry's confidence in the future prospects for Scotch around the world.

Producers across the board are continuing to invest in new distilleries and expand production at existing sites, in spite of growth rates slowing in recent months, notably in China.

Last month Remy reported a 40 per cent fall in operating profits on the back of weak demand for premium spirits in China in the year ended March 31.

It followed that by announcing a 5.7 per cent decline in first quarter sales yesterday to Euro 214.8 million as it continued destocking efforts in Asia

Sale of Remy Martin ognac fell by 15.3 per cent, which the company said was also linked to a challenging macro-economic climate and competition in western Europe, and a high comparative in the United States.

Sales of high-end spirits have been hit in China by government-led austerity measures and curbs on corporate gift giving. Whisky analyst Alan Gray said the industry remains positive about its long-term prospects worldwide, in spite of the challenges in the Far East.

He said: "The growth rate has slackened from what it was a year ago. I would say the industry is still positive.

"A lot will depend on how China performs. Obviously it is quite an important market and if the Chinese economy starts to recover that will be good news.

"In the short term, there has been a wee bit of a slowing down in the growth rate that the industry was predicting, [but] it's still taking quite a positive medium-term view."

Mr Gray added that, while Bruichladdich had been consistently profitable under its previous owners, the switch to Remy Cointreau was likely to accelerate its growth due to the French company's global distribution strength.

He noted: "There is no doubt Remy, with their distribution network worldwide, is quite good from that point of view."

The latest accounts for Bruichladdich show the distiller employed an average of 60 staff last year, up slightly on the 56 on the roster in the prior, 15-month period.

Wage and salary costs fell to £2.44 million, down from £2.71 million in the prior period.

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