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The family business behind the Sunday Times Wine Club has continued to invest heavily overseas to offset declining UK profits.

The "go-overseas" strategy began to pay off as international revenue increased to 27 per cent of group sales, said th Reading-based Direct Wines Holdings, which operates the Laithwaites chain.

Pre-tax profits rose by £500,000 to £11.5m for the year ended 1 July 2011 at the 42-year-old wine importer and distributor, despite turnover dipping slightly to £343.9m, compared with £344.3m 12 months earlier.

Chairman and founder Tony Laithwaite said: "In the UK, profit reduced as we decided not to pass on the full impact of VAT and yet more duty increases to our customers."

Laithwaites USA increased its sales by 29 per cent as the group aimed to reduce reliance on the "tough" UK market.

The rise was helped by the launch of its UK brand Virgin Wines and a continued tie-in with the Wall Street Journal, selling wine to its readers.

Laithwaites, which started in a small warehouse in Windsor, also grew "significantly" in the US, the chairman said.

Sales jumped by 47 per cent in Asia as the company grew its Laithwaites Wine brand and launched Virgin Wines.

The group also expanded in Europe, entering the market in Poland with the launch of Winoteka Domowa – translating as Wine Shop at Home.

As a result of all this activity, turnover in the rest of the world was boosted by more than £20m to £93.2m, compared with a fall of £20m in the UK to £250.7m.

Virgin Wines and Averys, which Direct Wines acquired in the last decade, increased profits in the UK, the company added.

In May, the group, which Laithwaite founded with his wife Barbara, sailed 1,000 cases of wine along the ancient trading route from Bordeaux to London flagship store, the Arch, at Tower Bridge. The stunt raised money for Macmillan cancer research.

Laithwaite spent summers in the 1960s working in Bordeaux vineyards before starting the business in 1969.

Direct Wines Holdings, which employs more than 900 staff, has yet to recommend a final dividend.

Glenn Caton was appointed as UK managing director in March.


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