PROFITS have fallen at Inver House Distillers after the Airdrie-based whisky company opted to buy in stock in order to save spirit for more lucrative older releases.
As sales have outstripped production, the company behind brands including Old Pulteney has long bought in spirit for its Hankey Bannister blend, which it sells overseas, as well as buying back casks of its single malts.
But in recent months the company has been squeezed by rising prices for mature whisky.
Inver House Distillers' managing director Graham Stevenson said: "The investment we have made in stock reserves in 2012 has been an essential part of developing our strategy for the Inver House brand portfolio as consumer demand increases in the global market.
"While it has had an impact on our profit margins this year, the underlying picture is very positive, for our brands and our business, as we respond to the exciting opportunities the industry will encounter in terms of shifting global demographics and emerging markets."
Turnover at the Old Pulteney producer rose by 13% to £91.1 million in the 2012 calendar year. But gross profit margins fell to 27.5% from 35.8% as the company, home to whisky brands including Balblair, anCnoc and Speyburn, spent more acquiring stock on the open market.
"We have always really been net buyers of some whiskies on the market," Mr Stevenson said.
"The truth of the matter is that in 2012 and continuing into this year, the prices have been considerably higher than before.
"The market for mature Scotch is very firm at the moment."
The result was a 10.6% fall in underlying operating profit to £12.6m. Pre-tax profit was down 21% at £12.3m, but after excluding exceptional items such as disposal proceeds and an insurance pay-out that inflated its 2011 numbers, the fall was 11.6%.
Mr Stevenson said: "We share in the optimism of the Scotch whisky industry and its ongoing potential for global growth and success in the longer term."
But he acknowledged that there had been headwinds in several key markets with some customers in Venezuela struggling to obtain currency for purchases, more muted demand in Russia and an anti-extravagance campaign in China that has hit luxury good sales.
"The world is an uncertain place but, long term, I am in the pretty optimistic camp," Mr Stevenson said.
He said that the growing middle classes in many emerging markets will support demand for whisky.
Meanwhile, the UK market in which Old Pulteney is strong is "holding up well", he said.
Old Pulteney saw sales volumes rise 16.2% and sales by value increase 24.7% as the company released a 40 year-old vintage and the 21-year-old release won plaudits.
Mr Stevenson said: "Old Pulteney in particular has had an excellent year, and our continued investment in a vibrant programme of marketing to support its maritime malt positioning and the release of several outstanding high aged expressions has delivered a great return, in particular driving value across the range."
He said that older whiskies were also becomingly increasingly popular in Asian markets where single malts are breaking into a sector dominated by blends.
Inver House is a subsidiary of International Beverage Holdings, which was established in 2005 as the international arm of major south-east Asian alcoholic beverage company ThaiBev.
Singapore-listed ThaiBev is controlled by entrepreneur Charoen Sirivadhanabhakdi and his family, and its brands include Chang beer.
Inver House paid a £5m dividend to its parent during the year, down from £9.5m the previous year.
Average employee numbers at Inver House totalled 184 in 2012, up one on the previous year.
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