Annual Report 2024 - Financial Review

Group Financial Performance Overview

Our strong performance this year reflects our ongoing focus on the ultra-premium category, and the sustained high levels of investment behind our brands and people, which drives increased consumer demand and the growth of our business.

Core revenue and core contribution grew by 11% and 16% respectively on the previous year, with particularly strong growth in the first six months of the year. The second half of the year reflected the significant reduction in consumer and customer confidence that was experienced by the whole industry. Pre-exceptional profit before tax was flat versus the prior year with the strong performance of the underlying business being offset by stronger sterling and higher interest costs. Our retained profit for the financial year, before exceptional items, declined by 1% and included the impact of a higher UK corporation tax rate.

We have continued to increase investment in the business through capital expenditure for both the quality and capacity of our operations, along with strategic investments in our sherry cask supply chain through the purchase of Vasyma SL, a cooperage in Jerez and an investment in Coopers Oak LLC, an American oak supplier in the US. In addition, the Group returned funds to shareholders through a share buyback totalling £80m, in addition to the £220m of share buybacks in the prior financial year.

Group Financial Performance (reported on a constant currency basis)

Core revenue

Core revenue grew by 11% to £1,165m, with a particularly impressive performance from The Macallan. Our strategy of generating consumer demand for our prestige products continues to drive superior growth with an improvement in the mix of our products sold.

Brand investment

Brand investment is a critical factor driving the ongoing growth of Edrington, supporting brand equity and engaging and educating consumers.  Once again, we have activated record levels of investment during the year, focussing on high quality and creative marketing campaigns, innovative collaborations, consumer education and experiences, and the launch of outstanding new products.  Our total brand investment of £262m was up 16% on the previous year, more than doubling in the last four years, and representing a re-investment level of 22% of core revenue. This will help fuel growth in the coming years.

Core Contribution

Despite the ongoing cost challenges from inflation and a signification investment in additional headcount focused on consumer and trade education, it is particularly satisfying that core contribution grew 16% to £455m. This growth means that we have been able to maintain our operating margin percentage through an improved product mix and the execution of our revenue growth strategy. 

Download the report to read more...