Good results for sherry group

Bodegas Gonzalez Byass, the Spanish sherry and brandy producer, has reported a 20.5 per cent increase in pre-tax profits for 2002, helped by the acquisition of the Croft sherry business from Diageo in October 2001.

Profits for the year reached €7.4 million, while operating profits were also higher in 2002, reaching €16.5 million compared to €12 million a year earlier, a 37 per cent increase. Turnover was up 17 per cent to €193.8 million.

Carlos Espinosa de los Monteros, chairman of Gonzalez Byass, said that the performance during the year had been particularly good because it had come amid difficult trading conditions both at home and abroad.

Export sales had been particularly strong during the year, he said, rising 53 per cent due almost entirely to the acquisition of Croft, but domestic sales declined during the year, falling 4 per cent.

But the Croft deal also lead to an increase in debt levels, said Espinosa de los Monteros, while new marketing and promotional campaigns for other brands, such as Soberano brandy, had also led to increasing costs during the year.

But the campaign at least had the desired effect of increasing sales of Soberano in Spain by more than 70 per cent, and this, combined with increases from other Gonzalez Byass brands in the home market led Espinosa de los Monteros to remain bullish about the prospects for 2003.

The Beronia brand of Rioja wines saw its sales rise 21.7 per cent in Spain during 2002, while both the flagship fino sherry brand Tio Pepe and the Solera 1847 oloroso also registered strong sales rises, which the company is confident can also be sustained in the current year.

While there are no acquisitions planned for this year, Espinosa de los Monteros said that a deal could not be ruled out entirely in the medium term, if the right one came along.