Edrington, maker of Speyside premium malt The Macallan, has become a billion-pound business following a 22% increase in revenues from its core brands that also include Highland Park, The Glenrothes and the Famous Grouse blended whisky.

Glasgow-headquartered Edrington also posted a 43% surge in pre-tax profits for the year to the end of March despite the decision to withdraw from its fourth-largest market, Russia, following the invasion of Ukraine. The privately-owned group also noted that while "the impact of Covid on the business appears to be largely behind us", it continued to suppress sales in China during the first half of the year.

Chief executive Scott McCroskie said the business delivered a solid performance in almost every country where its products are sold, with "particularly strong sales in China, Hong Kong, Taiwan, the UK, Spain, the Dominican Republic and the USA".

“Our business has delivered another highly successful year, despite a range of external challenges," Mr McCroskie said. "Revenue from our spirit brands passed £1bn for the first time and core contribution increased by 25% from last year’s record result.

The Herald: Scott McCroskieScott McCroskie (Image: Edrington)

“This strong trading performance has allowed us to invest industry-leading sums behind our brands, our people and our operations, as well as funding a substantial buyback of shares." 

Revenue growth outpaced the increase in volumes sold, reflecting a higher proportion of sales from the premium end of the portfolio. Core brand revenues hit a record of £1.08 billion on a constant currency basis while statutory revenues – which included the flattering impact of translating sales in overseas currencies into a weaker sterling – grew by 30% to £1.27bn.

Statutory pre-tax profits rose by 43% to £387.7 million, up from £270.7m the previous year.

The Macallan continued to lead the company’s performance, with high demand for products such as The Macallan James Bond Collection, The Red Collection 77-year-old, and The Macallan M series. The good result was further aided by a mixture of pricing and a higher proportion of sales coming from more profitable markets.

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The Glenrothes, Highland Park, and Naked Malt were also said to have performed well across key markets, growing the value of sales ahead of the increase in volume.

The Famous Grouse saw a “good recovery” in airport sales as Covid travel restrictions lifted, and performed well in core markets in Northern and Eastern Europe. Premium rum brand Brugal generated “outstanding growth” in the Dominican Republic and Spain.

In terms of corporate activity, The Macallan purchased a 50% stake in Spanish producer Grupo Estevez to secure the exclusive supply of its Sherry wines to season the brand’s signature oak casks for whisky maturation. That was followed by a deal in April in which Edrington became the majority owner of Wyoming Whiskey, increasing its stake in the business from 35% to 80%.

However, the group also cautioned that while it had successfully mitigated various external challenges including supply disruptions, high wage bills, and higher energy and commodity costs, the current financial year will be “impacted by several factors”. These include rising interest rates, an effective increase in UK corporation tax, and an increase in the value of sterling against the company’s basket of key currencies.

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“Whilst the economic landscape will continue to be challenging, the trading environment is improving,” Mr McCroskie said. “We have healthy brands, an effective strategy, record levels of investment in the business, great people and strong momentum.

“I am confident that Edrington is well-positioned to deliver sustainable success in the future.”

The group, which employs more than 3,000 people in its wholly-owned and joint venture companies, will pay a final dividend of 36p per share taking the total pay-out for the year to 53p, an increase of 10% on the previous year. This is on top of two share buybacks that returned a further £220m to its owners – chiefly The Robertson Trust charitable foundation.