Scottish spirits group Edrington slumped into the red last year after taking a hit on the value of its Brugal rum brand.
The Glasgow-headquartered firm, which is owned by the Robertson Trust and whose key lines include the Famous Grouse, Macallan and Highland Park whiskies, saw group turnover fall by £15.4 million to £617.7m in the year to March 31.
Pre-tax profit before exceptional items fell from £174m last year to £157.6m.
However, the impact of a £238.7m impairment on the group’s Brugal rum brand, which was severely affected by tough economic conditions and competition in its key markets of Spain and the Dominican Republic, meant the firm fell to an overall pre-tax loss of £52.7m compared with a £159.4m return a year earlier.
In his review of the year, Chief Financial Officer Alex Short said the headline financial results had been impacted in three areas a circa £5m hit over the previous year in relation to currency exchange costs, a reduction in non-branded sales and the performance of Brugal, where sales volumes had been “materially impacted” in the year.
However, Mr Short was positive about the firm’s core whisky operation.
“During the financial period Edrington’s Scotch whisky brands have continued to progress well, building share in what has been a fiercely competitive marketplace and a volatile economic environment.
“Edrington’s malt brands are performing particularly well as consumers are continuing to trade up, seeking brands that offer quality and authenticity.
“Edrington’s blended Scotch whiskies continue to maintain their strong market positions.”
Malt from Glenturret Distillery at Crieff is still used in production of the Famous Grouse and a visitor attraction at the site is popular with tourists.
Edrington also employs around 100 staff in a variety of finance and sales roles at its offices at West Kinfauns.
Chief executive Ian Curle said: “The last year has seen increased competition and continued polarisation of value across the spirits sector.
“Demand for super premium spirits particularly in the USA and Asia, has remained robust.
“The Government’s well-documented austerity programme in China, together with trade overstocking, has impacted the industry’s short to medium-term performance in Asia.
“This contraction, together with the adverse impact of foreign exchange and increased volatility across Eastern Europe, the Middle East and Africa, has increased competitive pressures in an already subdued European economic landscape, with the competition seeking alternative sales channels.
“In what has been a competitive marketplace and a year of route to market transition, the business has delivered a strong underlying performance.”
During the year the Robertson Trust, Scotland’s largest independent grant-making charitable trust, made 742 charity awards valued at £18.2m.