Weather and better margins give a lift to Aston Manor profits
Cider producer Aston Manor said profits were boosted in 2018 by the hot summer providing a lift to sales while cost controls helped it improve margins.
The company reported a 16% increase in profits for the year on turnover that rose 5% to £133 million.
The results cover the period in which Aston Manor was bought by Agrial, France’s largest cider producer, for a reported £100 million.
Chief executive Gordon Johncox said: “There has been a mix of volume growth, a continued focus on costs, as well as our developing brand and channel strategy, all contributing to the improvement in margins.
“Both the sunshine and high-profile sporting events enabled cider – covering value, mainstream and premium – to flourish.
“Our performance outside of the UK has also been impressive.
“The rest of Europe is increasingly an important market for cider makers as drinkers’ taste for British cider continues to grow.
“The additional emphasis we put on this saw our turnover improve markedly from continental Europe in 2018.”
Aston Manor has spent £30 million on upgrading capacity at its four sites over the past five years.
“In a market and a business environment that continues to be challenging, the clarity around our ambition to be a capable, progressive and professional business is being delivered by the commitment and great work of our people,” Johncox said.
“While we expect the future to offer up further challenges, continuing to invest in our capability, and being determined in our focus on what is important to us, should mean we are well-placed to build on the progress we are making.”
Johncox acknowledged some impact on the business – whose brands include Forsty Jack's and Kingstone Press – from the introduction of minimum pricing in Scotland, but said it was not alone.
“All alcohol categories have been impacted as it represents a bigger distortion to the market than I can ever recall,” he said.
“As a cider maker that has products from value to premium, we recognised there would be a considerable change in the mix of our business.
“When we reviewed the market data from Scotland every quarter, what struck us most was the steep decline in own-label drinks in several categories, not just cider but including lager, beer, ale and spirits.
“These are the value products, often lower strength, enjoyed by low-income households, people that are typically lower per capita alcohol consumers.
"It appears that people on lower incomes are being priced out of enjoying a drink, pointing to the regressive impact of a measure that is also forecast to reduce government revenues.
“At the same time the apparent substitution or displacement to other drinks points to a policy that is not yet delivering on the promises forecast.”
Johncox said Aston Manor was supporting the Alcohol Education Trust in its work to provide young adults with an informed and responsible relationship with alcohol.
“While progress on the responsibility agenda is pleasing to see, with less binge drinking and under-age consumption continuing to decline, there is more to do,” he added.