ISLE of Arran Distillers has reported its best performance in its 20-year history after lifting net profits by 51 per cent, accounts just lodged at Companies House reveal.
And the company has signalled its determination to capitalise on demand for its single malts by ordering two new pot stills.
The distiller is investing around £750,000 in the stills, which will boost its production capacity beyond one million litres of pure alcohol after they are installed at Lochranza in late 2016.
New accounts for Isle of Arran show the company booked net profits of £831,362 for the year ended December 31, up from £549,639.
The rise in profits came as turnover leapt by 21 per cent to £5.5m, with the volume of the Arran single malt portfolio up 23 per cent on 2013.
Asked to comment on the factors behind its success, managing director Euan Mitchell said: “In general, there is still very strong demand for premium quality single Scotch whisky, in particular from smaller independent craft producers with good brands and good stories to tell.”
While official figures show the value of Scotch whisky exports fell by seven per cent to £3.95bn in 2014, amid weaker economic conditions and political uncertainty in certain markets, Arran cited growth in key overseas territories such as Germany, Taiwan and Canada.
Its whisky is now available in 45 countries and new markets are being explored. France remains its biggest market and there was progress in the US, which Mr Mitchell said offered “massive potential” for the distiller. He signalled that China has yet to break through as a major market for the industry as a whole but underlined his belief that it will “take off” at some stage.
Mr Mitchell said: “There’s a very small percentage of people who understand the nature of our business. It is about getting them on board as ambassadors and getting them to spread the word amongst their peer group.”
In the meantime, Mr Mitchell cited Taiwan as the “shining star” for Arran in Asia, where consumers have embraced its 12 year old cask strength bottling.
And the distiller underlined the importance of the domestic market, noting that Arran Malt is poised for increased distribution in the UK thanks to a deal with Marks & Spencer. Sales grew by 30 per cent in the UK despite being in decline across the market in general.
Arran cited the repackaging of its core Arran malt range – the 10, 12 and 14 years old – as a key factor in its latest financial year, along with limited edition releases such as the final part of the Devil’s Punch Bowl trilogy.
Mr Mitchell declared his confidence that the distiller would have sufficient demand for the extra spirit the new pot stills will allow it to produce.
The stills are being manufactured by Forsyths of Rothes using the blueprint of the original stills, also made by Forsyths.
Mr Mitchell said: “It’s such a long-term investment, it’s such a long-term play in this industry. We’ve had a very good year and some companies have maybe had a slight blip last year, but you have always got to look to the future and have confidence that the market will continue to grow.
“It’s an investment for the next 10, 20, 30 years.”
The latest results for Isle of Arran were announced shortly after it received a visit from Chelsea FC owner Roman Abramovich, who was holidaying in Scotland.
Mr Mitchell said: “We were delighted to show him around and he was knowledgeable about single malts – it seems to be a passion of his.
“He left with a good number of bottles to stock his cabinet. It was great PR. For a small company like ours it is the best form of advertising we are ever going to get.”
The distiller is poised to begin building a VIP centre for international guests at the distillery, where they can sample casks and choose whiskies to be bottled.
Mr Mitchell hopes the facility will be ready early next year.
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