Tough trading conditions in China have failed to prevent whisky distiller Glenmorangie from serving up an 8 per cent rise in annual profits.
The firm, owned by French luxury goods group LVMH, said it was “very encouraged” by demand for its eponymous single malt and stablemate Ardbeg, which helped generate a 16.5 per cent jump in sales.
Latest accounts filed with Companies House show that the Edinburgh-based group made an operating profit of £17.7m for 2014, up from £16.4m a year earlier. Glenmorangie described the performance as “solid” amid an overall single malt whisky market that grew by 5 per cent in volume terms during the year.
Turnover in the year to 31 December rose to £81.7m, against £70.1m in 2013. However, the distiller added: “While the group recorded excellent momentum with solid growth from both Glenmorangie and Ardbeg brands, performance has been impacted by continued destocking by distributors in China.”
Partly as a knock-on effect of the government austerity campaign in China, overall direct exports to the country – the 26th largest market for Scotch – fell by 23 per cent to £39m in 2014, according to the Scotch Whisky Association trade body.
Glenmorangie, acquired by LVMH in 2004 in a deal worth £300 million, said: “The group continues to invest in advertising and promotion to support the accelerated growth of its brands in existing and emerging international markets.”
At the end of March, the firm sold the Scotch Malt Whisky Society (SMWS) to a group of private investors following a decade of ownership.
Writing in Glenmorangie’s annual report, president and chief executive Marc Hoellinger said that the sale of SMWS had followed a review aimed at finding ways of helping the society deliver more growth.
Hoellinger said that, since acquiring the business in 2004, the French-owned company had “invested and supported the expansion of the society both in the UK and internationally”.
He added: “The society management team and the Glenmorangie Company reviewed how best to grow the society further, exploring a number of options to ensure a prosperous future in the best interests of the society and its members. Following this review, the society management team and the Glenmorangie Company determined that new investors will enable the society to continue to flourish.”
The firm, which counts golfers Sir Nick Faldo and Tony Jacklin as its brand “ambassadors”, employs more than 200 people and said it would “continue to support the development of its brands with the resultant positive impacts on increases in production and employment in its operations”.