Revenue from Edrington branded products dipped 15% to £576.2 million with coronavirus restrictions on global travel retail, trade tariffs, and the on-trade premises significantly impacting sales of The Macallan, Highland Park and The Glenrothes.
The Macallan did however see strong performances in China, South-East Asia, and Russia.
Other brands fared better, The Famous Grouse extended its lead as the UK’s favourite whisky and proved resilient in core northern and eastern European markets. Premium rum brand, Brugal, also enjoyed growth in its home market of the Dominican Republic.
Net financial debt was £375.5 million, an improvement of £76.3 million on the prior year.
Edrington has also announced that it has agreed a significant minority stake in No.3 London Dry Gin, the ultra-premium gin owned by Berry Bros. & Rudd. The agreement will see No. 3 distributed across Edrington-owned distribution markets including the USA, APAC, Global Travel Retail and the Nordics. Berry Bros. & Rudd will continue to distribute in markets including the UK, Germany, Italy, Spain, Australia, and Belgium.
“In last year’s annual report, I anticipated a decline in profitability after several years of consistent growth as a result of the Coronavirus pandemic and tariffs on Single Malt Scotch Whisky in the USA, our largest market,” said Scott McCroskie, chief executive at Edrington.
“The reduction in net sales reflects pandemic-related restrictions as well as trade destocking primarily in the USA. Our decision to maintain relatively high levels of brand investment meant that core contribution reduced by more than net sales, although that was mitigated by a range of cost reduction measures. Our free cash flow and net debt both improved as a result of these measures, and I am pleased that the company remained well within its lending limits and banking covenant tests.
“I am proud of the way our people have responded to the pandemic, and of the results we have achieved. The fundamentals of our business are strong, and our brands are in good health. Although the pandemic will continue to impact our business for some time to come, I am encouraged by the growth in sales we have seen in the first quarter of this financial year. I am confident we can navigate the challenges we face and that we are ready to progress from a position of strength.”
“I am really pleased that Edrington will enter into a strategic partnership with our long-term partners Berry Bros. & Rudd on the No. 3 London Dry Gin brand. No. 3 complements the existing Edrington portfolio of exceptional ultra-premium spirits adding an award-winning and a beautifully elegant, classic London Dry Gin to our line-up of Single Malt Scotch Whisky, Rum, American Whiskey, Blended Scotch Whisky, and Tequila.”
