Booze distributor Cellar Trends took a knock to its profits after losing the rights to Angostura rum & bitters and Armand de Brignac champagne, latest results reveal.
The business posted a pre-tax loss of £270,965 for the year ending 31 May 2018, according to documents filed at Companies House.
It lost Angostura at the beginning of its trading year when the brand’s owner, Distell, restructured its UK operations, while Armand de Brignac had moved distributor in early 2018 “as the company’s volume ambitions exceeded those of the brand owner”, according to Cellar Trends.
Still, the directors were “very positive for the long term health of the company”, it stressed, given that Luxembourg-based drinks giant Amber Beverage had aquired a minority stake in the company - netting the distributor access to prominent vodka brand Stolichnaya (among others). Amber Beverage recently significantly upped its stake in Cellar Trends to 70%.
“The loss of Angostura was not covered by the part-year sales of Stolichnaya”, it said, resulting in the company “outwardly underperforming in the spirit sector”.
The addition of Stolichnaya “provides stability and security to the company as well as adding a brand with a unique proposition which will open wider trade opportunities to the other brands in the portfolio”, it said.
And despite the hit to its profits, Cellar Trend’s sales rose over the year, growing £2.3m to £37.5m. The company “still remains cash positive without the need for external short term funding”, it added.
Cellar Trends had also “changed its operational techniques of foreign exchange dealings”, which meant “together with a more stable sterling/euro exchange rate, exchange rate losses were substantially reduced during the year”.
However, it admitted Brexit may “result in volatility in this area”, given that a “substantial” portion of its portfolio - roughly 89% of its yield - was sourced from within the EU.
Its directors were “looking to take prudent risk of increasing stock cover over the immediate transition period, which, unhappily, coincides with the implementation date of the wine duty increase imposed by HM Treasury”.
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