Whiskey-maker Cooley Distillery has announced a 25 per cent rise in profits for the year ended December 31st, 2001, and expects a further rise of around 10 per cent in the current year.

The company also said it was in the final stages of negotiations with a European-based drinks company on a possible strategic alliance. Chairman Mr John Teeling said such an alliance would offer Cooley an international distribution network needed for overseas expansion.

Mr Teeling said the company with which Cooley is in talks has a very strong distribution network in Europe and the US as well as central and south America. The talks will be finalised before Cooley's annual meeting at the end of this month.

Mr Teeling said the unnamed group might take an equity stake in Cooley as well as provide the distribution network. He said the company would probably take the place of existing shareholders on Cooley's share registry offering some shareholders "an exit mechanism".

Cooley was currently selling three million bottles of whiskey per year but if the strategic alliance was secured that would grow to six million by 2007.

"We have the ability to produce around 14 million bottles per year and at present we are only using about a quarter of our grain capacity so the room is there for growth," he added.

He added the mooted strategic alliance would not only give the company access to a wider distribution network but would also see its marketing abilities greatly fortified. "It would be horrendously expensive for us to develop that on our own," he said.

Profits from ordinary activities in the 12 months to December 31st, 2001, were €816,000, up from €654,000 previously. The full-year figures have been delayed until now because the group had hoped to complete its strategic alliance talks before releasing them.

In the half-year to June 2002, profits were up by 25 per cent to €200,000 compared with the same period last year. The company makes the majority of its profits in the second half of the year, particularly at Christmas. It expects the second half of 2002 to be slightly weaker than the second half of last year due to depressed economic conditions globally. But full-year profits are expected to be around 10 per cent higher than last year.