Premium whiskies bottled and packaged in Fife helped drinks giant Diageo boost takings by 5% last year, as global bestseller Johnnie Walker broke the 20-million-case export barrier for the first time.
The brand, much of which is prepared for sale at the firm’s newly-upgraded plant at Leven, saw 12% growth in revenues, driven by strong performances in the US for its Black and Blue labels.
It contributed to a performance which saw Diageo’s turnover exceed £11.4 billion during the 12 months to the end of June, though restructuring costs and a write-down on its Cacique rum brand hampered profit growth.
Newly-appointed chief executive Ivan Menezes said the results showed Diageo’s management had made a “strong business stronger”.
Markets agreed, with shares in the firm closing the day up more than 3% at £20.54.
Group-wide, Diageo hailed double-digit growth in emerging markets and resilient UK trading, though Guinness sales fell by 3% in the UK and by 5% in Ireland.
Smirnoff sales grew by 4% worldwide, ahead of the wider market, while other successes in the UK included the launch of new Pimms and pre-mix drinks ranges.
“We have delivered 5% net sales growth, reflecting the strength of our US spirits business and continued double-digit growth in the emerging markets, despite weakness in some markets,” Mr Menezes said.
“Price increases in each region, positive mix in North America and Latin America and the rigour we have in managing our cost of production and controlling our overheads drove significant expansion in operating margin.”
The firm, which spent £1.8bn on marketing during the period, said its focused promotional activity had been a “key driver” of its performance, particularly in Scotch.
The FTSE 100 group’s extensive whisky business has significant operations in Fife, with more than a quarter of Diageo’s 4,000-strong Scottish workforce based in the kingdom.
A new £86m bottling plant was opened in Leven last year, part of a £200m commitment to the company’s operations in Fife over the last three years.
The group also recently announced a £1bn investment to boost its whisky production capacity in Scotland, alongside plans to build a new warehousing complex at Begg Farm, by Kirkcaldy, creating an additional 40 posts.
Diageo took on a controlling interest in Indian-owned United Spirits early last month after spending £344m on a 10% stake, boosting its holding to more than 25% and securing a voting agreement with other investors.
It is anticipated the deal which is being examined by competition authorities, and could be followed by the enforced disposal of Diageo’s newly-acquired interest in Whyte & Mackay will open up considerable opportunities in the potentially lucrative Indian market.
But the results also revealed how overall profits remained flat, thanks to the cost of changes to supply operations and a £50m exceptional charge for the declining value of top-selling Venezuelan rum Cacique.
Pre-tax figures showed a £2m increase on the same time last year, to £3.123bn.
Around 80 jobs are expected to be cut from the Scottish workforce during the firm’s ongoing regionalisation and efficiency drive, though a Diageo spokesman yesterday said it could provide no additional detail about a plan which it expects to be completed by next summer.