INVER House Distillers has seen profits slide by more than 20 per cent as it took a strategic decision to reduce bulk whisky sales in its latest financial year.
The Airdrie-based distiller, which owns the Old Pulteney, An Cnoc, Speyburn and Balblair single malts, took the step to help it continue to meet demand for its brands in future.
New accounts for the company show the strategy had an impact on its performance last year, with pre-tax profits coming in at £9.5 million, compared with £12.3 million in 2012.
Inver House, which since 2001 has been owned by International Beverage Holdings, the international arm of Singapore-listed Thai Bev, also saw turnover fall. Sales were booked at £77.1 million, after being worth £91.1 million in 2012.
Managing director Graham Stevenson insisted the results were in line with expectations.
He said: "The core single malts are still growing and were up about 16 per cent in value.
"We remain committed to the long-term growth of these brands, and continue to invest behind them, both in terms of marketing and more importantly retaining stock to meet our ambitions. The result of that is we have reduced our bulk sales, which is the main reason behind the fall in profit and sales.
"We are in the fortunate position of having a parent company that is completely committed to the long-term development of the brands. That's a great bonus for us.
"The results were pretty much as budgeted."
Mr Stevenson admitted problems in certain emerging markets, including the conflict between Russia and Ukraine, war across the Middle East and a recent military coup in Thailand, were causing short-term concerns for exports.
But he maintained the long-term export prospects for Scotch continue to look good, even though the most recent figures from the Scotch Whisky Association pointed to an 11 per cent fall in the value of exports in first six months of the year.
That confidence is reflected in a near £5 million investment Inver House is making to double production at its Speyburn distillery.
Due to be completed at the end of the year, the expansion will lift its production capacity to more than four million litres of spirit a year.
Inver House is also building 12 new warehouse "cells" at its headquarters in North Lanarkshire at a cost of £5 million, which will lift its storage capacity from 480,000 to 600,000 casks.
Those projects come after Inver House completed a £1.25 million project to renovate its Balmenach Distillery.
Mr Stevenson said: "Short to medium term, there are obviously concerns. The world is a pretty unstable place at the minute.
"The Ukraine-Russia situation is a problem, the Middle East is far from easy and the strength of sterling is making in difficult in a variety of markets.
"We've even had the recent coup in Thailand and its curfew and that has kind of upset that market a bit."
He added: "I see these as short-term issues - the long term the demographics in emerging markets remain favourable, and we are still confident the opportunities will arise in the long-term."
Due to its limited exposure in China, Inver House has not been directly hit by the crackdown on corporate gift giving in the market which undermined distillers such as Diageo and Pernod Ricard.
But he said that the trend in the Far East has had an indirect effect on the business. Mr Stevenson said: "The specific China situation actually doesn't directly affect us because we are not big in that area
"Whenever the bigger guys, the bigger brands suffer in important markets, they become more competitive in other markets so it has its knock-on effects."
The latest accounts for Inver House show the distiller, which is celebrating its 50th anniversary this year, employed an average of 194 staff in 2013, up from 184 in 2012.
The cost of wages and salaries was booked at £7 million, up from £6.8 million, with the package of the highest paid director (excluding pension contributions) coming in at £307,000, compared with £285,000 in 2012.
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