Whisky Focus - Ian Macleod Distillers Announce Significant Profit Increase

Ian Macleod Distillers Ltd, one of the largest independent family companies in the UK spirits industry, has announced its financial results to 30 September 2009.

Financial highlights:

• Profit after tax increased 90% to £2.2M (2008: £1.1M)
• Group turnover increased 18% to £26M (2008: £23M)
• Case sales are up £4.2m to £19.3M (2008: £15.1M)
• Travel retail up 40% on 2008 to £1.8M (2008: £1.3M)
• Overall stock has increased by £2.4M (11%)

The significant increase in post-tax profit is due to increased volume and margin throughout the year arising from the effective long term management of the company’s portfolio of brands.

The 18% turnover increase is due to increased sales to export markets, in particular sales of three year old blends in the Middle and Far East, with improved performance of premium brands in Europe. The volume growth is a combination of expansion of existing customer sales as well as new entry points generated by the market development work spearheaded by Managing Director, Leonard Russell.

Gross profit increased from 40.6% to 41.1% due to the impact of pricing agreed over the previous 18 months. The sterling exchange rate reduced the impact of the recent price agreements on those export customers who purchase in sterling, thereby holding up volumes. The weak pound also resulted in exchange driven price increases upon conversion.

During 2009 Ian Macleod Distillers invested in the Norwegian spirits distribution company Cask Owners AS, and now own a 34% share in that company. This exciting new venture has enabled Ian Macleod Distillers to be more directly involved in the Scandinavian market place and be able to grow spirit sales by being closer to the buyers in those markets.

Managing Director, Leonard Russell, commented: "Taking a share in this distribution company, in one of our important markets, is a natural progression for the company. We started life as whisky brokers, moving into bottling and distributing in the UK then took a major step with the purchase of Glengoyne Distillery in 2003 to become a single malt distiller. We are continuing the evolution of the company by extending its capability and reach into export markets."

Travel Retail sales are up 40% on 2008 representing a £0.5m increase, attributed to Ian Macleod’s five-year Travel Retail strategy, which started in 2007 with the appointment of Director of Travel Retail, Andy Lane. Travel Retail sales are driven by Ian Macleod’s flagship brand, Glengoyne Highland Single Malt Scotch Whisky, and its popularity in the market as well as the introduction of Travel Retail exclusive products such as Smokehead Extra Rare.

The company has invested most of the cash generated by its operations into bulk stock as overall stock has increased by £2.4M (11%). "Investing in stock is an essential pre-requisite for growing the business and ensuring long term stability and security" commented Leonard Russell.

"This has been an excellent year for Ian Macleod Distillers. We are progressively expanding and deepening our capabilities, which is then enriching our offering to our customers. Seeing the growth of our King Robert and other brands into the Middle and Far East has been incredibly rewarding and has contributed to our ability to make investments in stock and new ventures such as our involvement with the Norwegian distributors, Cask Owners."

"As an independent company we have the flexibility to drive the business forward at a realistic and measured rate, ensuring long term success".
 

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