DOUGLAS Laing & Co, the Scotch whisky blender and bottler, has seen profits slump by more than 70 per cent after a demerger effectively halved the size of the business in 2013.

However managing director Fred Laing revealed the firm is on track to double profits and get back to its pre-restructuring position this year - well ahead of the three-year target.

The Glasgow-based company was split by brothers and owners Fred and Stewart Laing to ease family succession issues in May 2013.

The assets, including its brands and stock, were effectively halved. Fred Laing has since continued to trade as Douglas Laing, the company established by their father in 1948, while Stewart has set up a new blending and bottling business, Hunter Laing.

In its first accounts to become available since the demerger, Douglas Laing & Co posted pre-tax profits of £457,000 for the 11 months to March 31.

While this was down on the £1.6 million booked the year before, Fred Laing said the business had "fared remarkably well" given the significant restructuring which took place.

With the demerger resulted in two of its previously best selling brands moving to Hunter Laing, turnover at Douglas Laing dropped to £2.98m in the 11 months to March 31 from £6.5m in the 13 months to April 30, 2013. At the same time, the company did not to reduce its overheads but added to its management team under a strategy to regain its pre-merger strength within three years.

Douglas Laing is now headed by a senior management team comprising Fred Laing, daughter Cara and her husband Chris Leggat, formerly of Suntory. Three new members of staff bolstered its headcount to 17 over the year, with a further member due to be hired in early 2015.

The company also invested £1.1m in stock over the period, boosting its inventories by 40 per cent as well as more than £120,000 in technology and brand development.

Fred Laing said: "From our point of view, considering we had such as shortfall of brands with which to work, such was the negotiation which took place for us to hold on to the company, I think we fared remarkably well.

"We've integrated a lot of new staff, and the policy is now to bring in staff with only Scotch whisky heritage behind them, which is great and was not always previously the case."

The period covered by the results saw the brand introduce two new brands, the Old Particular single malt range and Scallywag, a blend of Speyside malts, which contributed five months worth of sales.

They have been joined in the Douglas Laing portfolio post year-end by two further brands, Timorous Beastie which is a blend of Highland malts, and an XOP or extra old "big brother" to the Old Particular brand.

Mr Laing said the launch of Scallywag added further "legitimacy" to non-age statement or NAS category to the industry, which has become important to distillers as pressure on stocks have mounted.

Douglas Laing first moved into this arena itself five years ago with the launch of the Big Peat Islay malt brand.

Mr Laing said: "The same has followed suit with the Highland brand that we have released this financial year. So we're not just dependent on our single casks - we really think we are opening up this "vatted malt" [category]. It's a sector where I think I can bring the blending lessons that my father taught me to bear yet again.

"Having been out of the blending business for what has been 12 or 15 years as we specialised on the single casks, it brings me back almost full circle to what my dad was teaching me in blending skills. It's very heartening."

Mulling the international outlook, Mr Laing said the tensions between Russia and Ukraine meant an order due to be dispatched to Donetsk was cancelled at the eleventh hour.

Despite the collapse of the rouble, Russia remains an improving export market for the firm, though Mr Laing admits the currency issue makes its prospects for 2015 less visible.

Elsewhere in Europe, Germany and France are the firm's two biggest markets, and Scandinavia continues to be a happy hunting ground. In Asia, Hong Kong and Japan are important export markets for the brands, while in North America trading in Canada was described as "patchy"

"We're not as strong in the USA, so we really regard that as an opportunity," Mr Laing noted. "2015 will be the year for the USA. There has been so much other focus internally, [on] restructuring and indeed restocking. We've opened up filling programmes with new distilleries where we have had personal associations but not commercial associations.

"With what was essentially a smaller staff, we have been juggling a number of jobs each at the directorial level. Now we have the right people in place, it will allow Cara, Chris and myself to focus on the areas of strength we each bring to the equation."

Mr Laing noted the next set of accounts to be filed will be for a nine-month period as the firm returns to a calendar year reporting schedule.

And it is shaping up well, with turnover for the first eight months up 43 per cent at £3.1m.

Mr Laing said: "We're well on target to hit the position we were in within that three years. The two new brands we have introduced this financial year have impacted massively on the bottom line.

He added: "We've only had two months' sales from them both but it is sufficient to give our FD [finance director] the confident to close in December and bring things back on stream for a 12-month [accounting period] which is calendar year based as we progress."