GORDON & MACPHAIL, the venerable Scotch whisky bottler and distiller, has defied a challenging economic and political backdrop to hold profits steady at £4 million, amid a stellar performance in the UK.
The Elgin-based company said it maintained sales and profitability levels despite tough comparisons with the previous year, when it was boosted by the introduction of a 75 year old whisky as part of its Generations series.
Family-owned Gordon & MacPhail, which can trace its roots back to 1895, saw overall sales rise by 10.8 per cent to £28.3 million in the year to February, with UK sales climbing by 10.4 per cent to £19.4m.
Managing director Ewen Mackintosh said sales in the UK had been boosted by the Brexit-induced collapse in the pound, notably in shops in tourist destinations.
And he underlined the firm’s success in exploiting burgeoning demand for Scottish craft gin, which has boosted its wholesale operation in the UK.
“We’re really pleased with the UK performance. It’s a challenging, mature market, but the team has done really well to ensure we have the right mix of products going into that market,” Mr Mackintosh said.
The results featured a 27 per cent rise in sales for the company’s Benromach Distillery in Speyside, where it recommenced production in 1998 following its acquisition from Diageo. The distillery had been in mothballs since the early 1980s. Gordon & MacPhail invested to expand production capacity by about one-third at the distillery to 400,000 litres of alcohol over the period. It has built in the “headroom” to lift that to about 750,000 litres as it takes steps to meet the anticipated future demand for the Benromach range.
Mr Mackintosh, who revealed the company would consider acquiring a further distillery if the right opportunity arose, said the continuing growth of Benromach validates the company’s decision to move into distilling in its own right. He told The Herald: “We’ve worked very hard to invest to tell the story of the brand, to make people aware of what Benromach stands for. We see it in a number of sectors – everyone is looking for the provenance and are buying into the story of brands, and I think there is a very strong story behind Benromach.”
Mr Mackintosh said Benromach, whose international presence reflects the leading markets for Scotch whisky generally, chiefly France, Germany, the US and Japan, said the firm had benefited from switching to new distributors in certain countries. These include Taiwan, where it has successfully introduced sherry-matured and higher strength whiskies to meet local tastes.
Beyond Benromach the Gordon & MacPhail portfolio, which spans a broad range of age statements and styles, “continues to grow from strength to strength”.
Mr Mackintosh said demand for its more collectable whiskies held up during the year, boosted by demand from affluent customers and also helped in part by the weaker pound.
Asked for his views on the Brexit process, Mr Mackintosh said the firm is anticipating that it will ultimately result in higher costs, notably in terms of customs tariffs when importing dry goods such as boxes and bottles. But he said he is confident that demand for Scotch will remain intact in key markets such as France.
“It’s just going to be a challenge to seamlessly continue to trade in markets which have an appetite for Scotch,” Mr Mackintosh said. “We need to understand what the process is going to look like and if there is going to be any additional costs we need to build in.”
The company appointed two directors during the year. David King joined as international sales director, while Gillian Watson succeeded John Curran as chairman.
With five new posts created, its average headcount rose to 156. Former managing director Michael Urquhart retired in September this year after serving the business for 36 years, the last three as non-executive director.
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