Posted: Tue Sep 19, 2006 2:31 am Post subject: Glenmorangie to £4m loss
GLENMORANGIE has reported a loss of almost £4 million in its latest accounts after paying major compensation to distributors who lost business when the Mcdonald family sold the company.
The Broxburn-based whisky company, owners of malt whisky brands Glenmorangie, Glen Moray and Ardbeg, was sold to French drinks and fashion group Louis Vuitton Moet Hennessy in October 2004 for £300m.
In its accounts for the nine months to 31 December, the company revealed it had spent just under £17m terminating contracts as it integrated the group's distribution into that of its parent company.
Finance director Iain Hamilton said the payments represented "the one-off cost of coming out of existing distributors across the world" and moving into the Moet Hennessy distribution network, which gives its brands more focus and will make them more profitable over the longer term.
"The Glenmorangie Company is in a very strong position with great brands and now benefits from a powerful and integrated distribution network. It will be even more profitable, going forward," Hamilton said.
A further £300,000 was spent on redundancy payouts as staff were cut by 35 to 348.
The payments meant Glenmorangie made a pre-tax loss of £3.94m, £8.03m after tax. This compared with a profit of £6.2m in the preceding full year.
Reporting a shorter period to fall in line with its parent company's reporting calendar, turnover was £58.2m, barely changed on an annualised basis from £79.1m the previous year.
With a fall in costs, the group's operating profit rose by nearly £2m to £15.4m.
During the year, the company notched up £2.7m in capital expenditure, including £1m upgrading capabilities at the distillery and buying quality casks for its products.
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