Berry Bros & Rudd ‘has fallen well short of expectations’ in its most recent financial year, chairman Simon Berry has said - adding that he is confident of turning the situation around with the company's new management team.
Berry Bros & Rudd losses worsen in latest financial year:
Berry Bros & Rudd posted a net loss of £8.9m for the year ended 31 March 2015, against a loss of almost £5.9m in the prior year, according to accounts filed at Companies House.
Net sales fell by 5.1% year-on-year to £142m, while the company’s operating loss more than doubled to £4.1m.
Hong Kong costs
The losses have been magnified by an ongoing legal dispute between Berry Bros and a former distributor in Hong Kong, which cost the company £5.7m during the year, compared to £2.3m the year before.
The dispute encompasses several different cases, at varying stages of progress, the company said. It added that it would continue to defend its position ‘vigorously’.
Weak Bordeaux 2013 en primeur campaign
Overall group sales were impacted by a lacklustre Bordeaux 2013 en primeur campaign, with restricted volumes and high prices leading to disappointing trading.
This was, however, somewhat offset by stronger interest among fine wine buyers in Burgundy and Italian wine, the firm said. The BBX wine trading platfrom is also believed to have performed well.
‘Short of expectations’
‘It is clear that the financial performance of the group over the year has fallen well short of expectations,’ said Simon Berry.
‘The delivery of our business performance was also slower than we anticipated, most evidently in Asia.’ There was ‘more work to do’ to refine Berry Bros’ business model in the region, he added.
Since the end of the company’s last financial year, Berry Bros has appointed Tesco’s former head of beers, wines and spirits, Dan Jago, as the company’s new chief executive, and former BBR Spirits head Jeremy Parsons as COO.
‘Confident’ in the future
‘We are confident that the changes we have made will enable us to maximise our strategic potential, realise future commercial opportunities and take the necessary operational and financial steps to deliver our objectives,’ said Berry.
A spokesperson for Berry Bros told Decanter.com that the business has ‘strong underlying stability’ and the merchant has invested heavily in recent years.
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