McDowell & Company Limited Revenue up 33%, EBIDTA up 96%, PBT up 394%, PAT up 434%

United Spirits Limited the merged avtaar of McDowell and other Spirits companies of the UB Group, announced outstanding results for HY1 of FY07 at its first-ever Board Meeting after the merger became effective.

Profit before tax is up 394% to 170.6 crore compared to 34.6 crore during the corresponding period of the previous year. Earnings before interest depreciation and tax at Rs.239 crore are nearly double the comparative period figures of Rs.122 crore.

The merged entity has been consistently reporting quantum jumps in its Earnings before Interest, Depreciation & Tax, from June 2005 when McDowell acquired operational control of Shaw Wallace.

This performance has been made possible through healthy double digit growth in the sales of the profitable main line brands of which are over 29.4 million cases in HY1. Overall volumes are in excess of 32 million cases. Key brands like McDowell's No.1, Antiquity Blue, Signature, Royal Challenge, Bagpiper, White Mischief and Romanov have all registered healthy double digit growths. The drive initiated by the Company to push value rather than volume saw a nearly 5% rise over the previous year in the share of the value brands, which now stand at 92% of the total volume (Compared to 72% a couple of years ago). The company's recent introduction in the value Scotch segment - Black Dog Centenary Scotch Whisky has received a very encouraging response from the markets where it has been introduced.

The operations of Shaw Wallace and Triumph Distilleries have been seamlessly integrated into USL, resulting in cost savings by avoiding duplication of facilities across these companies.

As the crushing season approaches, the price of the Company's primary input viz. Spirit, is on the rise. However, the company has been able to adequately protect itself from the impact by a judicious mix of strategic relationship-building with spirits manufacturers and the maintenance of adequate inventory levels.

Depreciation at Rs.16.3 crore is higher than the Proforma aggregation for the corresponding period of the previous year due to acquisition of the assets of the merging companies on a fair value basis as dictated by Indian Accounting Standards. The 394% increase in profit before tax is after reckoning this extra depreciation charge. Finance changes at Rs. 52.5 crore are down to two-thirds of the previous year level consequent to a restructuring of debt undertaken by utilization of the proceeds of the GDR issue of McDowell in March 2006.

The merger of the various spirits companies of the UB Group - Herbertsons, Shaw Wallace Distilleries, Triumph Distillers & Vintners, Baramati Grape Industries, United Distillers India, Phipson Distillery, among others, with McDowell & Company is effective October 5, 2006. The appointed date of the merger is however, April 1, 2005 and the accounts adopted at today's Board Meeting are reflective of this merger. As envisaged in the Composite Scheme of Arrangement, the de-merger of the investment business of McDowell & Company Limited into McDowell India Spirits Ltd., has happened with the de-merger appointed date as the opening hours of April 1, 2005. The change of name of McDowell & Company Ltd. to United Spirits Limited and that of McDowell India Spirits Limited to McDowell Holdings Limited has also received sanction from the appropriate Authorities.

The Board also approved the financials for fiscal year ending March 2006. EBIDTA at Rs.259.22 crore is marginally lower than the proforma guidance figure of Rs.266 crore indicated earlier due to the inclusion of some future benefits of the employees of the transferor companies. For the fiscal year FY06, the Board has recommended a dividend of 20% on the expanded capital of Rs.94.48 crore.

Source : Equity Bulls

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