Au Vodka’s profits almost halved last year – despite sales continuing to soar – after the Welsh spirits distiller was hit by overstocking costs.
The Swansea-based business grew revenues by 25.9% to £65.0m in the year ended 29 April 2024, but saw operating profits tumble 95.1% to £5.1m, newly filed accounts at Companies House showed.
The decline was driven by an 83.2% leap in administrative expenses – to £13.5m – and exceptional costs of £3.9m over the period. These included £3.7m attributed to “excess inventory provisioning in relation to excess stock levels… compared to past, current and forecasted rates of sale,” and £205k of legal and professional fees, Au Vodka said.
EBITDA fell more modestly by 11.4% to £9.3m, which Au Vodka attributed to “investment in the business to enable ongoing growth, particularly investment in people”. The company employed an average of 66 people in the year to last April, compared with 50 in the year prior.
Demand for Au Vodka’s spirits and RTD cocktails continued to grow, wrote Au’s co-founder and company director Charlie Morgan. Volume sales of its bottled vodkas were up 5%, while RTD volumes had climbed by 206% to 18.2 million units, he noted.
While the UK remained Au’s largest market, accounting for 89% of all revenues, the company had successfully expanded into the US, Morgan said.
“This strategic move has supported global growth ambitions and enhanced overall brand visibility,” he said. “International expansion will continue to be a key priority, as the company builds on its momentum to strengthen its global presence and unlock new market opportunities.”
Read more: How Au stormed to success despite the spirits slowdown
Au Vodka was founded by Morgan and childhood friend Jackson Quinn in 2015. In 2017, the pair sold a stake in their fledgling business to DJ and then-Radio 1Xtra presenter Charlie Sloth. In return, Sloth got Au’s products into the hands of musicians, celebrities and influencers who helped grow the brand’s appeal on social media.
In 2023, the business sold a minority stake to private equity firm Metric Capital to support further expansion.
This sale was reflected in its latest accounts, with a new company named Aurous Bidco acquiring 100% of the ordinary share capital of Au Vodka’s holding company JAQ Holdings in November 2023.
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