Scotch whisky distiller Edrington, which produces The Macallan and Highland Park single malts, yesterday unveiled a 6% rise in underlying annual pre-tax profits to £411 million as core revenues jumped 11% to £1.165 billion.

Chief executive Scott McCroskie voiced his belief that Edrington’s results for the 12 months to March 31 were “among the best in the spirits industry”. However, mulling the outlook, he highlighted his expectations that demand would be adversely affected by economic pressures seen in the second half of the financial year to March 2024.

Mr McCroskie declared the “post-Covid spirits boom” had come to “an abrupt end” during the year to March 31.

He revealed that Glasgow-based Edrington, which is controlled by the charitable Robertson Trust, was consequently planning for lower levels of growth than those seen since the end of the coronavirus pandemic.

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However, Mr McCroskie also highlighted the distiller’s continued heavy investment in its brands.

Edrington declared that, in the year to March 31, markets in Asia Pacific showed “strong growth”, with China performing “particularly well”. It added that The Macallan Colour Collection had generated “outstanding early results” in the global travel retail segment.

Edrington employs about 3,300 people, with slightly more than half of its workforce based outside the UK. The UK workforce is predominantly in Scotland.

Mr McCroskie said: “Edrington has navigated a challenging year to deliver financial results that are among the best in the spirits industry. Our strategy of focusing on ultra-premium spirits continues to deliver healthy brands and a strong underlying performance.

“However, we consider that the economic pressures that we saw in the second half of last year will adversely affect demand. While we will continue to invest in our brands, in our operations and in sustainability, the business is planning for the coming year on the basis of lower levels of growth than we have experienced since the end of the pandemic.”

Brand investment by Edrington during the year to March 31 was £262.1m, up 16% on the prior 12 months.

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Core contribution, defined by Edrington as profits from its branded sales and distribution after the deduction of overheads on a constant-currency basis, rose by 16% to £454.8m.

In his chief executive’s review in the annual report, Mr McCroskie writes: “I am pleased to present another set of strong annual results for Edrington, which have been achieved despite the post-Covid spirits boom coming to an abrupt end during this reporting period. The year was one of two halves - an exceptionally strong first six months followed by a much slower second half. The changing dynamic was driven primarily by weaker demand as consumer confidence and spending power declined in response to rising prices and interest rates in many countries, as well as uncertainty about the future caused by a range of issues including conflict in Ukraine and the Middle East. The impact was exacerbated by trade destocking to meet the lower level of demand and to mitigate the higher cost of financing inventories.”

He adds: “Despite these challenges, Edrington achieved 11% growth in core revenue and a 16% increase in core contribution over the previous year. The higher rate of growth in core contribution reflects an increasing proportion of sales from higher value, more profitable products in line with our strategy.

“This year’s results continue a trend of strong growth, with Edrington increasing its core contribution by 87% over four years from 2019/20, despite doubling our brand investment in the same period. This achievement reflects the success of our ultra-premium strategy, and especially of The Macallan.”

Mr McCroskie reports that The Macallan “delivered robust growth in key markets across Asia Pacific and particularly in Greater China”.

He writes: “Our EMEIA region, encompassing Europe, the Middle East, India and Africa, performed well, whilst markets in the Americas were most affected by weaker consumer demand.”

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Flagging challenges for The Glenrothes and Highland Park in the year to March 31, while expressing confidence in the prospects for these single malts, Mr McCroskie says: “Our other ultra-premium single malts, The Glenrothes and Highland Park, have been affected by the drop in consumer demand last year, particularly as this has coincided with their repositioning programmes and our strategic decision to discontinue lower-value expressions. We are confident that the brands’ new ultra-premium positioning will resonate with consumers in the coming years.”

Edrington noted it had during the financial year increased its investments “in the supply chain that provides the highest-quality sherry-seasoned oak casks for The Macallan through the acquisition of the Vasyma cooperage business based in Jerez, Spain, and a 50% stake in its main supplier of American oak, Coopers Oak of Ohio”.

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The distiller observed that The Macallan has “launched celebrations to mark its 200th anniversary, featuring a unique partnership with Cirque du Soleil”.

Edrington added that the brand will launch a range of new products, experiences and campaigns over the coming year.