Red Bull marketing hits profits

Red Bull Company, owner of the energy drink brand in the UK and Ireland, saw pre-tax profits nearly halve in 2010 due to an increase in marketing costs and a sales dip in Ireland.

Pre-tax profits were £12,154,077 (2009: £22,304,469) against overall turnover down 6% to £231,972,678, according to its full-year accounts filed at Companies House.

Turnover in Britain was £206,822,331 (2009: £204,225,578) and in Northern Ireland and the Republic combined it was £25,150,347 (2009: 29,144,299).

"Growth momentum in GB during the year slowed down due to the economic and competitive environment," the company said.

"Consequently, turnover in GB only increased by 1.27% versus 2009. The poor trading results in Ireland, which is 13.7% down versus 2009, fully offset the favourable result in GB."

Operating profits were £12,145,421 (2009: £22,304,469), with profit for the financial year at £8,789,295 (2009: £15,764,114).

Red Bull Company said it organised two major national events in the period: the Red Bull Music Academy and the Red Bull X-Fighter at Battersea Power Station.

"A more joined business approach with our customers is the main reason why the marketing costs increased by 16.89% versus 2009."

"The decrease in sales and administrative expenses was a result of a cost-conscious approach, which can be seen in the reduction in employee headcount too [average employee numbers fell from 196 to 168, with staff costs down 20.4% to £13,124,809]."

Marketing costs as a percentage of turnover increased from 17.57% to 20.66%, with sales and administrative expenses as a percentage of turnover at 10.5% (2009: 12%).

Directors' salaries also declined from £2,753,954 to £857,988.

During the period, a final dividend of £12m for 2009 was paid. The same amount was paid in the previous year. No dividends were declared relating to 2010.