Scotland’s tenth largest whisky firm has enjoyed a 23% boost in profits as demand for its closely-managed stock of whisky increased.
Ian Macleod Distillers (IMD), which produces branded single malts including Tamdhu in Speyside and Glengoyne near Glasgow, revealed a rise in pre-tax profits to £8.3million in the year ended 30 September 2016 compared to £6.7million in the prior year.
The firm, which also trades its stock with other whisky firms as a source of income, said the profits boost was due to “the increasing and strong demand” for Scotch whisky. The Broxburn-based company, which valued its stock of spirit as being worth £67.2million – a rise of 4% on the prior year – said it carefully manages this stock as “the spirit cannot be replaced once sold”.
The distillers, which was established in 1933, said it was plugging £2.7million into its Tamdhu site at Knockando, adding a further four bonded warehouses in addition to five built previously.
It said it spent 73% of its capital expenditure budget on expensive sherry casks to mature spirit for both the Glengoyne and Tamdhu single malts, according to accounts filed at Companies House.
In addition to a range of whisky brands, several aimed at export markets in India as well as “own brand” bottles for supermarkets, it also produces gin and vodka, and bottles imported rum. It said that its”higher volume” business uses plant and assets that would be “under-utilised if the business solely concentrated on branded business”, while, in turn, “the branded business has higher returns of enduring value”.
The company’s Broxburn Bottlers business, a joint venture with family-owned distillers J&G Grant, continued to make a “positive contribution” to IMD’s bottom line although its share of operating profits fell 12% to £113,000 due to “reduced bottling services demand”, it said.
The company maintained a £400,180 dividend to shareholders in the year. The firm’s managing director, Leonard Russell, owns a majority stake in the firm as well as trusts of the founding Russell family. The firm’s highest paid director enjoyed a 9% annual payrise to £393,031, according to the accounts.
In its strategic report, the company said: “The group has benefited from the increasing and strong demand for Scotch whisky and this is evidenced by the growth in recent years. The group has invested significantly in operational assets and stock to support this growth.”
It added: “The company manages its whisky stocks so as to best achieve a balance between immediate sales and retaining stocks for the future. Stocks for the principal brands are very closely monitored as the spirit cannot be replaced once sold.”
Turnover for the group, which employed 111 in the year, rose 16% to £67.6million.
