PROFITS at Inver House Distillers have plunged by nearly 20 per cent in a transitional year which saw the Scotch whisky firm reduce its reliance on bulk spirit sales and restructure its distribution arrangements in the US.
Airdrie-based Inver House reported pre-tax profits of £9.5 million for the year to December, with turnover dropping by 15.2 per cent to £67.2m largely because of falling bulk whisky sales.
The distiller, owned ultimately by Thailand’s International Beverage Holdings, said its core single malts – Old Pulteney, Speyburn, anCnoc and Balblair – had broadly shown “excellent growth” during the year.
However it highlighted slowing growth in the US, where the switch from its own distribution model to a deal with Sazerac led to a rise in operating expenses, and in Russia, where demand was affected by weak currency and depressed economic conditions.
Trading conditions were also challenging for the distiller in emerging markets such as Thailand, home country of the company’s owner.
Stripping out the US and Russia, Inver House said the value of sales generated by its single malts rose by 8.6 per cent. Old Pulteney, produced in Scotland’s most northerly mainland distillery at Wick, saw sales rise by 6.6 per cent, while anCnoc, Speyburn and Balblair saw increases of 6.6 per cent, 8.6 per cent, 9.7 per cent and 10 per cent respectively.
Away from Scotch, sales of Scottish small-batch gin Caorunn, which is made at the Balmenach distillery, grew by 65 per cent in value terms last year.
Inver House continued to invest last year to build whisky stocks for future sales and to market and promote its brands.
The investment included a multi-million project to expand its Speyburn Distillery in the north of Scotland, doubling its capacity to 4.2m litres.
Inver House had previously spent £1m to renovate its Balmenach Distillery, also in Speyside.
Managing director Graham Stevenson, who backed the industry to cope with the challenges presented to international sales by the Brexit vote, said: “Although our reported profits have fallen, our actual results are slightly ahead of expectations. 2015 was the start of a period of transition as we began to reduce our reliance on bulk and lower value products, and we took the opportunity to make significant changes to our distribution arrangements in the very important US market.
“We have strong brands which continue to grow despite difficult trading conditions in numerous markets.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here