Whiskey in the jar – Glenmorangie’s results

The uneasy state of the world economy may cause some to think of turning to the drink, but for whisky producer Glenmorangie, this might be a cause for cheer.

The distiller publishes its interim results next week and hopes are fairly high for something of a turnaround following a bad sales period in the US due to the terrorist attacks on September 11.

Although the company declined to release a trading statement prior to going into its closed period before the interims publication, chief executive Paul Neep did say that sales in the US and duty free markets were recovering from the post 9/11 slump. UK sales may also have been helped by the strong marketing presence the company has shown, including its ‘glen of tranquillity’ television adverts.

Glenmorangie has also made several other recent moves that should help to reduce costs and increase revenue. Just over a month ago the firm announced it was dropping Moet Hennessy as its distributor in Germany, Spain, the Netherlands, Austria and Switzerland, effective from February next year.

In its place, the Glenmorangie brand will be distributed by Bacardi-Martini.

It will also be responsible for the firm’s Ardbeg Islay brand in some of these countries.

The firm already has an existing deal with Bacardi-Martini for distribution in France, Italy, Belgium and Portugal, among others, and the move will bring European distribution of all Glenmorangie brand’s European distribution under the same roof. The company hopes to trim over £1m in distribution costs from this deal, due to a unified European presence.

Glenmorangie is also hoping to see some benefit from the full UK launch of Drambuie Cream. The firm has entered into a joint venture with Drambuie, called Gelnaird, to produce the drink, which mixes 15-year and 17-year old malt whiskies with cream and honey.

The product has had successful trials across the UK in the past two years and with the full launch, production is being moved to Glenmorangie’s bottling plant in Broxburn, West Lothian. Recent trading seems to indicate that investors are reasonably confidence in the company’s future. Strong trading in the last few weeks has seen the company’s value rise by over #10m. Last year the company was excluded from the FTSE small caps index due to insufficient trading of its shares. It seem this problem may be behind it for the time being.

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