Profitability and turnover rises at Berry Bros & Rudd
The UK’s oldest wine merchant, Berry Bros & Rudd, is delivering progress on its five year plan, as operating profits triple and turnover hits £220.2 million, its latest results reveal.
Speaking to The Times ahead of publishing its annual results, Berry Bros chief executive Emma Fox said the five-year plan, which she launched last year, was focussed on driving profitable growth through better management of the portfolio and driving efficiencies which would help boost underlying earnings.
“Big topline revenue growth is not the business we’re in,” she told the newspaper.
Turnover at the UK’s oldest wine merchant rose 7.2% to £220.2 million in the year to March 2022, Fox revealed, representing a rise of a 3.7%, excluding an adjustment for en primeur wine (that are stored but are yet to be invoiced to customers). Meanwhile operating profit before joint ventures and exceptionals more than tripled to £14.9 million.
As a result, the company swung from a pre-tax loss of £8 million last year (due to refinancing costs and the devaluation of several of its freehold properties during the pandemic) to a profit of £17 million. This, in turn, helped restore the dividend, which stands at 896p a share.
In spite of inflationary headwinds, the business remained resilient Fox added, arguing that the business was “not really a retail business as such”.
“The mainstay of the fine wine and spirits model is collectors — private clients who buy wine, predominantly from us, to lay down in our cellars to drink at a point in time,” she told The Times. “The core of what we sell is Bordeaux and Burgundy, of which a big chunk is through en primeur. We are the world’s biggest buyer of en primeur wines.”
Last year, the merchant reported soaring demand for en primeur sales while its January results showed its subscription to its wine cellar business has risen by more than a third.
Over the last few weeks, the merchant has transferred its wine stores to a new £4.5million state-of-the-art warehouse in Andover, which was officially opened two weeks ago – moving more than 8 million bottles of fine wine to the new site, a process which Fox said had been “faultless”.
“We’ve just moved eight million bottles of wine across and we only broke four bottles,” she told The Times.
The bespoke warehouse at Andover Business Park has the capacity to store more than 14 million bottles of wine in total, making it one of the largest fine wine storage facilities for private clients in Europe. The site also generates its own energy supply through solar panels and rainwater harvesting.