Broadland Drinks reports increase in pre-tax profit

By Lisa Riley

Published: 19 August, 2020

Broadland Drinks has reported an increase in pre-tax profit to £2.9m for the year ending 31 March 2020, up from £2m the previous year.

The company’s revenue increased 11.9% to £79m, up from £70.6m, while net assets increased from £9.2m to £11.6m, according to Broadland’s annual report released today.

The company said the report showed "a strong performance given the continuing fall in UK wine consumption, the political uncertainty surrounding Brexit and the highly competitive retail sector”.

Its core brands Three Mills, Minivino, Proudly Vegan and Waipapa Bay continued to show “strong growth”, with increased distribution through key retailers in both the UK and USA.

The growth in overseas turnover had been “impressive”, it added, with a 79% increase from £4.54m to £8.16m largely driven by sales to the USA, in particular the successful delivery of the Wine Advent Calendar to a major retailer operating across multiple US States, it said.

Mark Lansley, chief executive of Broadland Drinks, said: ”We changed the company’s name to Broadland Drinks, from Broadland Wineries, with the aim of extending our portfolio of products and repositioning ourselves in the broader drinks marketplace.

“The first initiative of the year was to invest in a canning line initially offering line extensions to our existing brands - Minivino, Three Mills and La Fiesta - and then creating a number of innovative new drinks which are in the pipeline for 2021.”

The line capacity also meant that Broadland could offer key retailers medium and short runs for own-label cans, “encouraging easy trial and innovation”, he added.

During the year, Broadland extended Minivino into cans and introduced a range of Three Mills Botanicals. In addition, it launched two new brands - No Ordinary, aimed at consumers looking to explore less well known wine regions or grape varieties, and La Fiesta.

Due to the government announcing a significant change to the legislation on Post Duty Point Dilution (PDPD), which took effect on 1 April 2020, Broadland said it had reformulated its products to mitigate the change and introduced new products such as the Three Mills Botanicals and the La Fiesta range of drinks.

This legislative change would also shape the finances of the company going forward, as the shift backwards in the duty point would “reduce bank borrowings and stock holding value, positively affecting cashflow and the working capital cycle”, it said.

This may also result in a lower turnover in future years, as customers are able to take product under bond or on deferment account, it added.

For the first three months (April-June) of the current 2020/21 financial year, sales were “above budget”, with exposure to the on-trade offset by retail demand.

“The Company’s existing long-term growth strategy should continue to deliver growth and I am cautiously optimistic for the future,” concluded Lansley.

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