Scotch whisky chief pays price as turmoil hits industry
An eventful two years in charge saw Diageo issue a profit warning in June 2024 following a slump in sales in Latin America as the post-pandemic spirits boom began to fade, and in May this year the company warned that US tariffs may hit profits by $150 million per year.
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An efficiency plan has been launched in a bid to slash costs by around $500m in the next three years against a backdrop of macroeconomic and geopolitical upheaval, which has weighed on demand for premium spirits across the board. This pressure has been felt by other major Scotch whisky producers too, including Pernod Ricard, owner of Dumbarton-based Chivas Brothers, and Remy Cointreau, owner of the Bruichladdich Distillery on Islay. Remy cited the uncertain market conditions as it scrapped a long-term sales target in June.
And the turmoil has not just been felt by the major players, with smaller distillers feeling the impact of global events as well as rising operational costs and subdued consumer demand.
Diageo announced this week that chief financial officer Nike Jhangiani had been appointed chief executive on an interim basis while it conducts its search for a permanent successor for Ms Crew.
Chairman John Manzoni acknowledged that Ms Crew had been in charge during a difficult period. He said: 'On behalf of Diageo and the board, I would like to thank Debra for her contributions to Diageo, including steering the company through the challenging aftermath of the global pandemic and the ensuing geopolitical and macroeconomic volatility. On behalf of all Diageo colleagues, I wish her every success in the future. The board's focus is on securing the best candidate to lead Diageo and take the company forward. We strongly believe Diageo is well placed to deliver long-term, sustainable value creation.'
Elsewhere this week, Scottish legal giant Brodies served up a strong set of financial results. The firm reported a 15th consecutive year of growth despite challenging conditions domestically and internationally, with operating profits edging up above £50 million in the year ended April 30. Revenue climbed by 11% to £126.7m, driven by growth across all of the firm's core practice areas.
Managing partner Stephen Goldie said: 'Achieving progress amid continuing domestic and global headwinds reflects the resilience and ambition of our clients in Scotland, across the UK, and internationally. Their trust in us to deliver results on complex and exciting mandates inspires us to work harder and smarter every day.
'Recording our fifteenth consecutive year of growth is testament to the strength of those relationships and the dedication of our colleagues to deliver exceptional legal services.'
It was a good week, too, for Craneware, the Edinburgh-based company that provides revenue management software to the US healthcare market. On Wednesday, shares in the company leapt by more than 10% after telling the City it had been profit expectations and delivered a bullish assessment of its future prospects.
It was the first update from Craneware since it rebuffed a takeover approach from US-based Bain Capital that valued the business at nearly £1 billion.
The company expects to deliver a 12% rise in underlying profits to more than $65m in the year ended June 30.
Chief executive Keith Neilson, pictured, said: 'We are pleased to see our growth rates accelerating and profitability exceed expectations, with this year's performance supporting a move to sustainable, double-digit growth.'
Craneware has about 200 employees in the UK made up mainly of product developers and engineers.
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