Macallan maker Edrington sees sales top £1 billion as whisky lovers go premium

Edrington, the whisky and spirits producer behind Speyside premium malt The Macallan, has cheered a year of “outstanding growth and investment” after revenues topped £1 billion for the first time.

The spirits giant said its flagship brand had continued to lead the company’s performance, with high demand for premium products including The Macallan James Bond Collection, The Red Collection 77-year-old and The Macallan M series. The Glenrothes, Highland Park and Naked Malt performed well across key markets, growing the value of sales ahead of the increase in volume. The Famous Grouse, meanwhile, performed well in its core markets in northern and eastern Europe, with good recovery reported in the global travel retail sector and a strong performance in the UK.

Brugal, the Glasgow-headquartered group’s premium rum brand, continued to generate “outstanding growth” in its home market of the Dominican Republic and in Spain, its top international market. Its “ultra-premium” expression, Brugal 1888, is also said to have performed strongly.

Accounts for the year to the end of March reveal that core revenue grew by 22 per cent year on year to just over £1.08bn. Profit before tax was up by 43 per cent at £387.7 million. However, net debt at March 31 stood at £598m, an increase of £223m from 2022. Two years ago, Edrington reported double-digit declines in annual sales and profits as it was impacted by the pandemic but said at the time the outcome was not as bad as expected.

Chief executive Scott McCroskie said: “Our business has delivered another highly successful year, despite a range of external challenges. Revenue from our spirit brands passed £1bn for the first time and core contribution increased by 25 per cent from last year’s record result [to £413.6m]. This strong trading performance has allowed us to invest industry-leading sums behind our brands, our people and our operations, as well as funding a substantial buyback of shares. The business delivered a strong performance in almost every country where our products are sold, with particularly strong sales in China, Hong Kong, Taiwan, the UK, Spain, the Dominican Republic and the US.”

He added: “Whilst the economic landscape will continue to be challenging, the trading environment is improving. We have healthy brands, an effective strategy, record levels of investment in the business, great people and strong momentum. I am confident that Edrington is well-positioned to deliver sustainable success in the future.”

Edrington employs more than 3,000 people in its wholly owned and joint venture companies, with over half of those employed outside of the UK. Aberlour-based The Macallan remains the group’s central focus, supported by Highland Park and The Glenrothes in the fast-growing single malt category and Naked Malt in the blended malt sector. Its portfolio is completed with Brugal premium rum from the Dominican Republic, The Famous Grouse blended Scotch whisky, and Wyoming Whiskey and Noble Oak in the American whiskey category. The group also has a strategic partnership with No.3 London Dry Gin.

Edrington, whose main shareholder is The Robertson Trust, owns its route to market in 16 countries and distributes its brands to more than 100 countries through joint ventures and third-party agreements. The trust has donated some £343m to charitable causes in Scotland since 1961.

Part of the vast Macallan distillery and visitor experience centre on Speyside. Picture: Ian Gavan

In its annual report, Edrington highlighted a number of corporate deals undertaken during the year, including the acquisition of a 50 per cent stake in Grupo Estévez of Jerez, securing a sustainable supply of the finest quality sherry wines to season The Macallan’s signature oak casks. It also became the majority shareholder in ultra-premium whiskey brand Wyoming Whiskey. Meanwhile, Igor Boyadjian was appointed managing director of The Macallan business unit, and Kengo Torii, representing Suntory Holdings, was appointed to the Edrington board. The group said it had also met independently-verified carbon reduction targets as part of its commitment to reach net zero by 2045. During the year to March, brand investment totalled £232.5m, an increase of 28 per cent on the year before.

Writing in the annual report, chairman Crawford Gillies said: “Edrington’s strategy focuses the business sharply on ultra premium spirits. We continue to demonstrate our willingness to invest in our brands, other assets and capabilities that fuel growth in that chosen area of focus. Although we do not pursue growth for its own sake, it is nonetheless gratifying that Edrington has posted its highest-ever revenue, with sales of our brands passing £1bn for the first time. This success has allowed us to make corporate as well as brand investments during the year. Despite continuing economic headwinds, Edrington’s portfolio of brands is well-positioned for further growth and I look forward with confidence to the year ahead.”

The board has decided to pay a final dividend of 36p per share for the year to March 2023, which together with an interim dividend of 17p results in a total pay-out of 53p per share, up 10 per cent from 2022. In addition, the strong performance has allowed the group to return to shareholders, by way of two share buybacks, a further £220m, a sum “significantly bigger” than the annual dividend.

Statutory results, reported at actual currency rates, show that group revenue grew by 30 per cent to some £1.28bn. The growth in the reported statutory result for revenue exceeded the figure on a constant currency basis as the company experienced a weaker sterling against its key currencies during the financial year. Profits attributable to Edrington shareholders, before exceptional items, increased by 84 per cent to £169m.