AIRDRIE-based Inver House Distillers has defied challenging conditions in emerging global markets to record a 22 per cent rise in profits to £8.8 million.

But it warned that Brexit is continuing to cause disruption to the supply chain.

New accounts for the Scotch whisky company reveal a 12 per cent rise in sales for the distiller’s single malt portfolio, which helped lift overall turnover by 7% to £67.3m in the year to September 30. That included a 20 per cent rise in sales for Old Pulteney, the company’s flagship single malt, which is distilled in Wick. The distiller also highlighted a 23 per cent increase in sales of strong performance by Caorunn Gin.

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Inver House, which is owned by Far East drinks giant Thai Beverage, said it continued to focus during the period on its branded products portfolio, which followed a strategy change several years ago to scale back its involvement in bulk whisky sales. It made progress in spite of challenges in Russia and several African markets, with growth slower in Vietnam and north Asia than anticipated.

However, managing director Martin Leonard warned that Brexit “continues to cause minor business disruption”, which includes constraints on the supply of glass due to companies stockpiling. He also warned that, “looking further ahead, a no-deal Brexit could result in short-term logistics disruption for EU trade.”

The firm is unable to “definitively assess the impact” of Brexit, including the regulatory and legal consequences, until there is “further clarity” on the future relationship between the UK and the EU.

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Mr Leonard said: “The impact on international customs tariffs is likely to be limited as World Trade Organisation rules mandate zero tariffs on Scotch whisky exports into major markets including the EU. There may be additional costs from tariffs on raw materials or packaging components sources from the EU, although this is not expected to have a material impact on ongoing profitability.”

Writing in the accounts, Mr Leonard noted that overall margins at Inver House had improved to 39% from 38%. This partly reflected the better margins generally offered by single malts, which made up a greater percentage of overall sales over the period.

Mr Leonard, who succeeded Graham Stevenson in 2017, writes in his business review that the firm had invested during the year to lay down more whisky stock, with the value of its stock increasing by 3% to £122m at year end. Further investment was also made in brand packaging development and marketing, as well as in its main warehousing and blending sites in Airdrie, and at its five distilleries.

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Mr Leonard said: “Operating expenses were slightly higher compared to the prior year. Given the tougher trading environment the company is focused on minimising costs, however investment behind the brands is also key to maximising their potential.”

The accounts show that Inver House employed an average of 216 staff over the period, up from 212, while payroll costs edged up to £10.2m from £9.9m.

They were published shortly after Mr Leonard outlined the company’s hopes of growing sales in China and Hong Kong after Thai Beverage acquired a majority stake in Asiaeuro, a major Far East-based drinks distributor.