EAST Kilbride-based Burn Stewart Distillers has achieved better than expected profits as moves to take its whisky portfolio upmarket paid off.
The South African owned company said it delivered a strong performance in the year to 30 June, recording a £9.1m pre-tax profit on sales of £73.2m.
In the accounts for the period director Fraser Thornton said the profit for the year was ahead of expectations and the group was well placed for growth.
Highlighting Burn Stewart’s success in export markets, Mr Thornton said the company was well placed for growth.
The firm appears to be following the kind of premiumisation strategy that other whisky makers have adopted to cash in on the emergence of a new class of affluent consumers in market such as Asia. This involves selling limited edition bottlings and using packaging designed to mark products out as special.
Mr Thornton wrote: “Despite the overall industry decline in blended Scotch whisky exports, the group’s blended portfolio achieved positive volume and revenue growth.”
He noted the flagship Scottish Leader blend did well in both South Africa and Taiwan supported by upgraded packaging.
Sales of Black Bottle grew helped by increased marketing and a reworked blend profile closer to the nineteenth century original.
The company recorded double growth in revenues from sales of its Deanston and Bunnahabhain single malts.
Mr Thornton said it increased profit margins on malt sales substantially, helped by selling limited edition bottlings in selected countries, which he did not name.
Burn Stewart was acquired by South African drinks giant Distell for £150 million in April 2013. Mr Thornton said the integration of Burn Stewart into the group is going well.
Burn Stewart changed its year end to June in 2014.
The value of Scotch whisky exports fell by three per cent in the first six months of last year, to £1.7bn. Exports fell by seven per cent annually in 2014 following a decade of record-breaking growth
The crack down on extravagance in China has hit sales in the country.
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