Latest news with #McCroskie
The Herald Scotland
14 hours ago
- Business
- The Herald Scotland
Scotch whisky distiller - glass half-full or half-empty?
However, Edrington chief executive Scott McCroskie made no bones this time last year, when the distiller reported stellar results for the 12 months to March 2024, about the trading climate by that point having turned somewhat chillier. While voicing his belief back then that Edrington's results for that financial year were 'among the best in the spirits industry', he simultaneously highlighted his expectations as he mulled the outlook that demand would be adversely affected by economic pressures seen in the second half of that period. It is crucial to consider the drop in profits for the year to March 2025 in the context of both the tougher times for the overall industry recently and the growth achieved by Glasgow-based Edrington in recent years. And the extent to which Edrington's profits are ahead of pre-pandemic levels, even after the sharp fall recorded for the year to March, surely provides some reason for at least the half-full types to raise their glasses in albeit a perhaps more muted toast than last year. It has been a big week for both Edrington and William Grant & Sons, with completion of a major transaction first announced last September. Edrington this week completed the sale of The Famous Grouse and Naked Malt brands to William Grant & Sons, which backed the Glasgow-based distiller in its £601 million acquisition of The Macallan owner Highland Distillers back in 1999. Highland was Edrington's joint venture partner for The Famous Grouse blended Scotch. It was interesting to see Edrington and William Grant & Sons highlight how pleased they were with The Famous Grouse and Naked Malt deal after this was completed this week – but more of that a bit later. Edrington on Wednesday reported a 26% fall in pre-tax profits before exceptional items to £274.4m for the year to March 31, as Mr McCroskie flagged a 'hostile trading environment'. Read more Core revenue fell by 10% to £912m, with the group highlighting a 'challenging economic environment' and reduced consumer demand in international markets. The distiller said: 'After a period of industry-leading growth, during which the business has grown significantly, this has been a period in which Edrington experienced the full-year impact of reduced consumer demand.' And Edrington, which has the charitable Robertson Trust as its principal shareholder, flagged increased production and employment costs in the context of the 28% fall in its profits to £291.4m in the year to March 31 on the 'core contribution' measure. Core contribution is defined by Edrington as profits from its branded sales and distribution after the deduction of overheads on a constant-currency basis. Mr McCroskie, as he mulled the current outlook, declared: 'We believe top-line growth will be difficult to come by in this environment, although adjustments to overheads and brand investment are expected to align net sales and core contribution more closely next year.' Amid the undoubted challenges, it is important to recognise there were also significant positives in Edrington's results announcement. While the distiller observed the 'decline in sales was broadly consistent across international markets', it noted that 'exceptions' included 'a resilient performance by Brugal rum in the Dominican Republic and The Macallan in South Korea and Japan'. Edrington added: 'The Macallan 12, 15 and 18-year-old expressions continued to grow in China and the company saw high consumer demand for products launched to celebrate The Macallan's 200th anniversary.' The distiller also declared The Macallan had 'marked a successful 200th anniversary year and recorded its second-highest year ever for sales, reinforcing its position as the world's number one single malt Scotch whisky by value'. And Edrington observed: 'Core contribution was 38% ahead of pre-pandemic levels.' We should take a moment, amid the tougher times for the Scotch whisky sector in general of late, to contemplate and indeed celebrate that tremendous progress. Mr McCroskie reiterated Edrington's focus on 'ultra-premium' spirits as he commented on the distiller's results for the year to March. He declared: 'Our focus on ultra-premium spirits has driven Edrington's growth in recent years and we have continued to execute our strategy despite the hostile trading environment. This includes further strategic investments in our sherry cask supply chain and in reducing our carbon footprint.' Read more And, noting Edrington's completion of its sale of The Famous Grouse and Naked Malt brands on July 1, he added: 'This reflects our choice to focus on the premium end of the market, where we are best placed to compete.' William Grant & Sons was meanwhile upbeat about what it was getting from the deal. It said: 'The Famous Grouse is Scotland's best-selling whisky and one of the top-selling Scotch whisky brands worldwide, renowned for its quality and heritage, while Naked Malt has garnered a loyal following among whisky enthusiasts and has significant growth potential within the blended malt segment.' Søren Hagh, chief executive officer of William Grant & Sons, said: 'I am delighted to complete this acquisition and welcome The Famous Grouse into our portfolio. It is a remarkable Scottish brand with rich history and a strong market position in a number of countries. Over the coming years, we will build on this strong foundation and work to evolve the brand into a true global icon. 'We also see a lot of potential in Naked Malt, which will be a great addition to our portfolio. Together, these brands perfectly complement our vision for growth, and we look forward to investing in their future and sharing their stories with whisky lovers around the world.' Hopefully, both Edrington and William Grant & Sons will prosper in the wake of this major deal as they pursue their respective strategies. These are heavyweight players that have been through plenty of ups and downs in terms of the global trading environment over years and decades. And the long-term success of both - taking account of all the benefits this has brought to the Scottish economy and labour market - is surely something to cheer.
The Herald Scotland
2 days ago
- Business
- The Herald Scotland
The Macallan Scotch whisky owner flags 'hostile' environment
And Edrington highlighted the fact its 'core contribution' measure of profits in the year to March 31 was, in spite of a 28% fall during the period, still 38% ahead of pre-pandemic levels. Edrington, which this week completed the sale of The Famous Grouse and Naked Malt brands to William Grant & Sons, reported a 26% fall in pre-tax profits before exceptional items to £274.4m for the year to March 31. Core revenue fell by 10% to £912m, with the group flagging a 'challenging economic environment' and reduced consumer demand in international markets. Edrington said: 'After a period of industry-leading growth, during which the business has grown significantly, this has been a period in which Edrington experienced the full-year impact of reduced consumer demand.' Read more The Scotch Whisky Association reported in February that the overall value of Scotch exports fell by 3.7% to £5.4 billion in 2024. And it observed then that global trading conditions remained 'turbulent' at the beginning of 2025. Edrington said today: 'The decline in sales was broadly consistent across international markets, with exceptions including a resilient performance by Brugal rum in the Dominican Republic and The Macallan in South Korea and Japan. The Macallan 12, 15 and 18-year-old expressions continued to grow in China and the company saw high consumer demand for products launched to celebrate The Macallan's 200th anniversary.' Edrington flagged increased production and employment costs in the context of the 28% fall in core contribution to £291.4m in the year to March 31. Core contribution is defined by Edrington as profits from its branded sales and distribution after the deduction of overheads on a constant-currency basis. Edrington, which also owns The Glenrothes single malt, observed: 'Core contribution was 38% ahead of pre-pandemic levels.' Scott McCroskie, chief executive of Edrington, said: 'After several years of unprecedented growth for premium spirits and industry-leading results posted by Edrington, the business felt the full effect of the global economic downturn during the year. 'Our focus on ultra-premium spirits has driven Edrington's growth in recent years and we have continued to execute our strategy despite the hostile trading environment. This includes further strategic investments in our sherry cask supply chain and in reducing our carbon footprint.' Edrington's principal shareholder is The Robertson Trust, which has donated £396m to charitable causes in Scotland since 1961. Noting Edrington's completion of its sale of The Famous Grouse and Naked Malt brands to William Grant & Sons on July 1, Mr McCroskie declared: 'This reflects our choice to focus on the premium end of the market, where we are best placed to compete.' He added: 'Looking ahead, the political and economic backdrop remains volatile, which we expect will continue to weigh on consumer sentiment in the coming year. We believe top-line growth will be difficult to come by in this environment, although adjustments to overheads and brand investment are expected to align net sales and core contribution more closely next year. 'Edrington's strategic focus on ultra-premium spirits remains effective. We will continue to execute it to strengthen our brands and our business for the long-term benefit of our investors, our employees, and those who benefit from our own and our principal shareholder's charitable activities.' Edrington employs more than 3,000 people in its wholly owned and joint venture companies, with over half employed outside the UK. It distributes its brands to more than 100 countries.
