THE owners of Loch Lomond Distillers have revealed they have invested "millions and millions" of pounds in the business since acquiring it from drinks veteran Sandy Bulloch just over a year ago.
A management buy-in backed by private equity group Exponent, and led by former Imperial Tobacco executive Colin Matthews, saw the assets and liabilities of Loch Lomond Distillery Company change hands for more than £210m in February 2014, its latest accounts state.
It was the third biggest deal in the Scotch whisky industry last year, eclipsed only by Suntory's £9.8bn purchase of US giant Beam in January, and the £430m sale of Whyte & Mackay to Emperador of the Philippines in May.
And the new leadership at Loch Lomond has moved quickly to scale up the business.
Millions of pounds have been spent on refining the look and recipes of its brands, led in the UK by the relaunched High Commissioner Scotch and Glen's vodka brands, alongside significant investment in infrastructure across its production sites in the west of Scotland.
Now the focus is on presenting the brands to a worldwide audience, with the first exports beginning this month.
Details of the investment were revealed as Loch Lomond Distillers reported underlying earnings before interest, tax, depreciation and amortisation of £20.1m in the 12 months to September 30.
Last time pre-tax profits rose to £24.3m from £469,003, boosted by income related to its sale.
The investment made in the business in recent months has involved the doubling capacity at the Glen Scotia distillery in Campbeltown, where a visitor centre has been opened and warehousing extended.
Extra stills have been installed at the single malt and grain distilleries which sit side by side in Alexandria, and the bottling line has been upgraded at the Glen Catrine bonded warehouse in Ayrshire, allowing the company to meet all of its packaging requirements.
A premium version of Glen's vodka, the UK's second most valuable spirits brand which is made in Glen Catrine, has been developed, with the firm in the process of launching its Loch Lomond single malt and blend to the UK market. Barrels have been acquired to meet future needs.
Overseeing the operation is highly experienced management team, including former Diageo international finance director Richard Miles and ex-William Grant group operations director Bob White has been assembled to oversee the operation.
The board is chaired by former Diageo chief financial officer Nick Rose.
While the experience of the management team had allowed the company to quickly drive change, Mr Matthews praised the workforce it inherited. The company, which has joined industry body the Scotch Whisky Association, currently has 186 staff.
He said: "They have been terrific and absolutely welcomed the change. They are seeing our investments - you physically see the investments, so you get much more reassured and happy with what your company is [doing].
"We're not saying for one minute it previously [was not run properly]. Obviously they must have been running it correctly for us to buy it. We've just taken it to another level."
With the changes made to the brands, the focus is now on pushing them out to the wider world. Links have been established with local distributors in the biggest export markets for Scotch, helped by the connections made by senior directors in their previous careers.
Asia, Africa, Europe, the Middle East, Latin America, the US, Canada and the Caribbean are all on the agenda, with the issues currently affecting Scotch exports to countries such as China and the US dismissed as "temporary challenges".
The strategy will involve capitalising on the "fantastic names" its brands offer, noting that Loch Lomond is second only to Edinburgh as a tourist attraction in Scotland and Glen Scotia is one of only two surviving distilleries in Campbeltown - "the hidden fifth region" of Scotch whisky production.
Whisky experts and consumers across the world have been consulted on the type of liquids and packaging they would like to see from Loch Lomond. Mr Matthews said the consumer feedback is firmly embedded into the culture of the business.
The executive, who previously headed Imperial Tobacco's business in Africa, the Middle East and the Indian sub-continent, believes the business offers enormous potential.
"It has some huge brands which were under-exploited and under-developed in the UK and across the world," he said. "The demand from across the world for our brands from Campbeltown has been absolutely extraordinary."
Accounts filed newly filed at Companies House show the distiller booked a statutory loss of £11m before tax, which does not reflect a range of accounting factors linked to the acquisition.
These include £9.9m of unaudited profits made over five months under the previous owners.
An adjustment of £10m has also been made in the accounts to reflect the production price of stock, which had been bought at market value, alongside some non-cash entries. These include the amortisation of £30m goodwill created at the time of the acquisition, to be written off over five years, and interest on inter-company loans of £5.1m.
"Between those is about £9m of accounting or non-cash items," said Mr Miles.
"It's a bit complicated, but it's a statutory accounting figure which we don't think reflects the true performance.
"The true performance on a 12-month basis is about £20m of profit, which is pretty much bang in line with our business case expectation.
"Overall we were very pleased with the results for that period."
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