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Global whisky demand boosts Tamdhu maker

GLENGOYNE and Tamdhu whisky maker Ian MacLeod Distillers has continued to prosper amid growing global demand for Scotch with a near 25% increase in annual profits.

Cheers: Leonard Russell now heads the company founded by his grandfather in 1933. Picture: Graham Hamilton
Cheers: Leonard Russell now heads the company founded by his grandfather in 1933. Picture: Graham Hamilton

The company, which has its main base in Broxburn, West Lothian, also booked a 17% rise in turnover from £50 million to £58.6m for the 12 months to September 30, 2013.

Accounts recently filed at Companies House state around £3.5m of the turnover uplift was as a result of the Speyside distillery at Tamdhu, which it bought from Edrington in 2011, being operational for the full period. The remainder of the increase was put down to growing demand from consumers around the world.

Ian MacLeod produces whisky including Isle of Skye, Langs and Smokehead as well as its own brands of gin, rum, tonic wine and vodka. The family business is headed by majority shareholder Leonard Russell, whose grandfather founded it in 1933. The financial statement shows the rise in turnover helped pre-tax profits go from £4.8m to almost £6m. The directors signalled they are continuing to invest and said: "This is the first year in which Tamdhu distillery was fully operational throughout. The sale of the resultant new distillate together with an increase in bulk trading accounted for £3.5m of the total increase in turnover.

"As well as investing in stock and related casks the company is having whisky maturation warehouses built at Tamdhu. Once complete they will be able to accommodate a significant proportion of the bulk stock."

The repackaging of Glengoyne single malt was said to have increased brand turnover. The company has invested more than £3m in the Glengoyne site, at the foot of the Campsie Hills, since 2007 and said the visitor centre there contributed to turnover growth.

The rise in profit came in spite of a much lower contribution from its joint venture bottling subsidiary Broxburn Bottlers which was £726,000 behind in terms of operating profit when compared to 2012.

Writing in the accounts the directors of Ian MacLeod said: "This is partly due to a change in the revenue and cost mix of the product handled as manufacturing volumes are broadly consistent."

They went on to explain Broxburn Bottlers, which Ian MacLeod has a 50% stake in, also operates on a different financial reporting period and the timing of management charges has an impact.

They said: "Additional management charges are based on calendar year profitability and are raised in the last quarter of the calendar year. In the consolidated figures there is a mismatch between when the profits are earned and the booking of the management charge.

Thus the final calendar quarter of 2012 returns a loss in Broxburn Bottlers books and is therefore included in the consolidated result even though the year as a whole was profitable for that company."

Norwegian firm Cask Owners, which Ian MacLeod owns 33% of, was said to be profitable and grew its turnover 33% while the Indian subsidiary broke even.

The value of stocks listed on the balance sheet rose from £41.6m to £49.2m. Staff costs increased from just short of £5m to more than £5.8m with average employee numbers up from 88 to 97, mostly as a result of additional people at Tamdhu. Directors emoluments increased from £1.4m to £1.7m with the highest paid seeing their rewards jump from £374,316 to £689,469.

There was no dividend paid in a year when net debt widened from £31.7m to close to £36.9m.

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