Grouse helps Highland to 10% interim increase: Distiller's shares ease on profit-taking despite pounds 23m result

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Drinks analysts yesterday upgraded full-year profits forecasts for Highland Distilleries after the maker of Famous Grouse reported a 10 per cent rise to pounds 23.4m before tax for the first half.

Highland's shares, however, eased 12p to 403p, due in part to some profit-taking on a price that has risen 46 per cent in a year and to flat headline sales figures. Turnover in the half year to end-February was down 1 per cent to pounds 97.2m, but was up 6 per cent excluding duty.

Analysts expect Highland to make pounds 42m to pounds 42.5m for the year, a rise of pounds 1m to pounds 1.5m on previous estimates. They also expect a 10 per cent interim dividend increase to 1.76p to lead to a 7.2p total for the year, up from 6.6p.

John Goodwin, chairman, said Highland managed to maintain premium prices for Famous Grouse despite 'an exceptionally competitive marketplace'.

Scotland was the most difficult area, depressed by some heavy price discounting. Profit margins in England and Wales were also squeezed by special offers in supermarkets.

Grouse, which contributes 45 per cent of total profits, held on to its 14 per cent share of the UK whisky market of 8.4 million cases.

Exports continued to grow, and Grouse had market shares above 2 per cent in Canada, France, Greece, Sweden, the Netherlands, and Thailand.

More than 40 per cent of Highland's profits came from interest receivable, up from pounds 2.1m to pounds 3.2m, and from associates, mainly Robertson & Baxter, which lifted contributions from pounds 5.8m to pounds 6.6m.

Associate profits were helped by Robertson increasing its stake in the North British Distillery company from 32 to 50 per cent last year.

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