Benriach Makes £1.88M Loss After Grendronach Acquisition

[John]

BenRiach Distillery Company slumped into the red following a major acquisition by the whisky firm during 2008, it emerged yesterday.

Accounts from Companies House revealed BenRiach made pre-tax losses of £1.88million last year, against profits of £1.95million in 2007. But the 2008 figures were severely impacted by a £5.53million impairment charge against the value of goodwill at Glendronach, which is at Forgue, near Huntly. Had it not been for this exceptional cost affecting the balance sheet, Larbert-based BenRiach would have made further profits.

BenRiach was formed through the 2004 acquisition from French drinks giant Pernod Ricard of the previously mothballed BenRiach Distillery, near Elgin. The buyers were Billy Walker, who is now BenRiach's managing director, and two South African businessmen.

Glendronach was acquired from Chivas Brothers Pernod's Scotch whisky subsidiary in the autumn of 2008 in a deal believed to be worth £30million.

In September, Mr Walker revealed BenRiach was to pour £7million into restoring the Glendronach brand.

He said he wanted to re-establish Glendronach to its status of 40 years ago, when it was among the five most popular malts in the world.

BenRiach is investing £5million in sherry casks over four years and a further £2million on brand promotion and extra staff to boost the sleeping giant. By 2014, the company hopes to be selling some 250,000 bottles of Glendronach annually.

But the plans for developing the business have recently been hit by floods.

Earlier this month, Mr Walker said he felt he was "pouring money down the drain" after the visitor centre and offices at Glendronach flooded for the second time in three months.

BenRiach's 2008 accounts showed turnover of £12.08million, against £8.13million a year earlier. The firm's net debt at the end of last year was £15.76million, up from £3.4million at the end of 2007.

A report from the directors said continued investment in BenRiach's products, with particular emphasis on quality and employing people with the relevant experience, would help the company to improve its market position.

BenRiach employed 31 people on average last year.

John

Source: Press & Journal