REG - Distil PLC - Half-year Report
05/11/2024 07:00
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RNS Number : 8905K Distil PLC 05 November 2024
Distil plc
("Distil", the "Company" or the "Group")
Interim Results for the six months ended 30 September 2024
Distil plc (AIM:DIS), owner of premium drinks brands RedLeg Spiced Rum,
Blackwoods Gin and Vodka, TRØVE Botanical Vodka and Blavod Black Vodka,
announces its unaudited interim results for the six months ended 30 September
2024.
Operational highlights:
· Launch of Blackwoods First Drop Gin - the first to be produced at
Ardgowan
o Shortlisted as a finalist at Scottish Gin Awards
· Successful preview of Blackwoods new brand home at the Ardgowan Open
Day
· Lighthouse hospitality and premium retail listings secured for
Blackwoods gin and Blackwoods vodka
· Regional out-of-home advertising and sampling campaign activated
throughout summer for RedLeg rum
Financial highlights:
· Revenues decreased 38% to £393k (2023: £632k)
o Q2 revenues -8% YoY
· Gross profit decreased 44% to £158k (2023: £283k)
o Cost of goods has shown recent improvement, with an 14% reduction in Q2
year-on-year
o Reduction in freight costs equivalent to 47%
· Volumes decreased 42% year-on-year
o Q2 volumes +0.3% YoY
· Investment in brand marketing and promotion increased by 42% to
£239k (2023: £168k)
· Administrative costs increased by 11% to £541k (2023: £489k)
· Loss before tax of £555k (2023: £314k)
· Cash reserves at period end of £314k (2023: £321k)
· Successful £0.65m (gross) equity fundraise in October 2024 to fund
working capital, major account listings and development of brand range
extentions
Chairman's Statement:
The first six months of the financial year have been challenging for the
business as we have felt the impact of wider industry and macro-economic
conditions as consumers have less disposable income for socialising both in
and out-of-home.
Q1 was particularly difficult, as we remained affected by the stock 'hangover'
in the trade from the slower Christmas period in 2023. This impacted trade
sales into key customers and distributors.
Shifting consumer habits in response to inflation meant that stock levels had
not been depleted at the usual rate, reducing the level of orders throughout
Q4 of the prior financial period and Q1 of the current financial year. This
was combined with general category trends downwards to create poor numbers of
sales out, although the impact at a consumer level was not as severe.
In comparison, Q2 revenues were up 88% on Q1. Q2 revenues remain down 11%
year-on-year, but this is in line with overall market trends. August and
September 2024 volumes were up 5% year-on-year, which is an encouraging trend.
Revenues for the same two months were down 2% year-on-year, however this was
driven by product mix, with a significant increase in Blavod licensed sales
versus the previous year.
Throughout the half year we have readjusted our plans and the key focus
through to the end of the year will be on increased promotional support
through the key Christmas period, as well as supporting rate of sale in
existing and newly-won on-trade customers.
The market is showing early signs of improved consumer confidence with the
full-year outlook more positive, but we remain cautious, and cash management
will be a focus area for the business, ensuring to prioritise higher ROI
spend.
Operations
The recent operational climate has brought both challenges and opportunities.
In Q2, we made significant strides in controlling production costs, driven
primarily by optimising our purchasing strategy. We've seen a marked reduction
in freight expenses, which has been a substantial relief given the ongoing
volatility in global logistics affecting distribution networks.
We continue to explore opportunities for alternative purchasing sources and
have successfully negotiated more favourable terms with key suppliers, helping
to mitigate the impact of these challenges on our cost base.
Despite the external pressures, we are optimising our inventory management
practices, which has enabled us to reduce storage costs while ensuring we
maintain adequate stock levels to meet demand.
Cost management remains a critical focus area. We've been proactive in
identifying areas for efficiency gains, particularly in our production
operations and warehousing. These efforts are yielding results, with a notable
reduction in operational overheads over the past quarter, predominantly from
freight costs. However, with inflationary pressures on both transportation and
packaging, we remain vigilant and are closely monitoring market conditions to
adjust pricing strategies as needed.
Marketing and New Product Development
H1 saw the first distillation of Blackwoods gin at the brand's new home at the
Ardgowan distillery and the launch of Blackwoods First Drop to commemorate
this significant milestone for the brand.
Just 1,500 bottles were produced in the traditional one-shot method, with
nothing but water added post-distillation. Further details can be found at
www.distil.uk.com.
The limited-edition gin was a finalist at the Scottish Gin Awards along with
the Blackwoods Vintage Gin and Blackwoods Navy Strength gin, and has been
nominated for further prestigious spirits awards.
With the gin stills now operational and opening of the brand home experience
on the horizon, a programme of distillery-exclusive products is being created.
Throughout H1, support continued for RedLeg in Brighton, rebuilding the brand
in the city in which it launched, with sponsorship of Brighton Fringe
festival, billboard advertising and product sampling.
The summer also saw the release of the second RedLeg limited edition bottle.
The limited edition was released to celebrate summer entertaining and was
available in major grocery outlets, as well as direct through the RedLeg
website (https://www.redlegrum.com/) .
Ardgowan Distillery Project
Fit-out of the Blackwoods Brand Home on the Ardgowan Distillery site is
underway, with key joinery and decoration having been completed. A portion of
the funds raised
from our £0.65m fundraise in September will be used to finish the works to
open to the public as soon as possible, generating a new revenue stream for
the business.
Progress on the whisky distillery is gathering pace, with key process vessels
having been installed, and the whisky stills due to be installed by the end of
the year. The team is aiming to commence whisky distillation during Spring
next year.
Results versus same period last year
As reported in April, we experienced higher Q3 (Oct-Dec 2023) sales last year
versus the previous financial year. Following a slower than expected Christmas
period in consumer response to economic conditions and the high spirits duty
increase in August 2023, the trade was experiencing a stock hangover in Q4
(Jan-Mar 2024), which continued into Q1 of this current financial year.
The reduction in Q1 sales has significantly impacted the half-year results,
whereas Q2 results are down year-on-year, but in line with market conditions
and internal expectations.
Outlook
After a slow start to the year, we are encouraged by the uplift in Q2,
particularly as we head into our busiest sales period. We've been working with
our distribution partners to ensure we have a strong programme of promotional
activity through to the new year, to generate further sales uplifts.
H2 will see the launch of a further limited-edition RedLeg SKU, along with the
opening of the Blackwoods Brand Home which will generate a new revenue stream
for the business, amplifying the wins we've secured in the on-trade and
premium retail in H1, which we also anticipate to grow through to the end of
the year.
Enquiries:
For further information, please contact:
Distil PLC
Don Goulding, Executive Chairman Tel: +44 203 283 4006
SPARK Advisory Partners Limited
(NOMAD)
Neil Baldwin Tel: +44 203 368 3550
Mark Brady
Allenby Capital Ltd
(Broker)
James Reeve/Piers Shimwell Tel: +44 (0)20 3328 5656
Jos Pinnington/Guy McDougall
This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
Law by virtue of the European (Withdrawal) Act 2018, as amended. On
publication of this announcement via a regulatory information service this
information is considered to be in the public domain
About Distil
Distil Plc is quoted on the AIM market of the London Stock Exchange. It owns
drinks brands in a number of sectors of the alcoholic drinks market. These
include premium spiced rum, vodka and gin, and are called RedLeg Spiced Rum.
Blackwoods Vintage Gin, Blackwoods Vodka, Blavod Original Black Vodka, TRØVE
Botanical Spirit and Diva Vodka.
Distil plc - Half Year Results
Consolidated comprehensive interim income statement
Six months ended 30 September 2024 Six months ended 30 September 2023 Year
ended 31 March 2024
Un-audited Un-audited Audited
£'000 £'000 £'000
Revenue 393 632 1,523
Cost of sales (235) (349) (787)
Gross profit 158 283 736
Administrative expenses:
Advertising and promotional costs (239) (168) (515)
Other administrative expenses (541) (489) (1,094)
Impairment losses - - (202)
Share based payment expense - (17) (17)
Total administrative expenses (780) (674) (1,828)
Operating loss (622) (391) (1,092)
Finance income 77 77 150
Finance expense (10) - -
Loss before tax from continuing operations (555) (314) (942)
Income tax - - (225)
Loss for the period (555) (314) (1,167)
Loss per share:
From continuing operations
Basic (pence per share) (0.08) (0.05) (0.16)
Diluted (pence per share) (0.08) (0.05) (0.16)
Consolidated interim statement of financial position
As at 30 September 2024 As at 30 September 2023 As at 31 March 2024
Un-audited Un-audited Audited
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 184 150 142
Right of use assets 305 - -
Intangible fixed assets 1,454 1,648 1,453
Financial assets 3,000 3,000 3,000
Deferred tax assets 126 351 126
Total non-current assets 5,069 5,149 4,721
Current assets
Inventories 1,252 1,189 1,205
Trade and other receivables 233 479 580
Cash and cash equivalents 314 321 526
Total current assets 1,799 1,989 2,311
Total assets 6,868 7,138 7,032
LIABILITIES
Current liabilities
Trade and other payables 491 483 516
Financial liabilities 150 150 150
Lease liabilities 7 - -
Total current liabilities 648 633 666
Non-current liabilities
Lease liabilities 308 - -
Total liabilities 956 633 666
Net assets 5,912 6,505 6,366
EQUITY
Equity attributable to equity holders of the parent
Share capital 1,785 1,474 1,695
Share premium 6,715 6,211 6,704
Share based payment reserve 218 218 218
Accumulated losses (2,806) (1,398) (2,251)
Total equity 5,912 6,505 6,366
Consolidated interim cash flow statement
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
Un-audited Un-audited Audited
Cashflows from operating activities £'000 £'000 £'000
Loss before tax (555) (314) (942)
Adjustments for non-cash/non-operating items:
Finance income (77) (77) (150)
Finance expense 10 - -
Depreciation 7 8 18
Amortisation 6 - -
Expenses settled by shares - - 7
Loss on disposal of property, plant and equipment - - 1
Share based payment expense - 17 17
Impairment of intangible assets - - 202
Unrealised foreign currency losses 2 2 -
(607) (364) (847)
Movements in working capital
Increase in inventories (47) (120) (136)
Decrease in trade receivables 304 404 303
Increase/(decrease) in trade payables 18 (371) (338)
Cash used in operations 275 (87) (171)
Net cash used in operating activities (332) (451) (1,018)
Cashflows from investing activities
Purchase of property plant & equipment (49) (5) (8)
Expenditure relating to the acquisition and registration of licenses and (1) (15) (22)
trademarks
Net cash used in investing activities (50) (20) (30)
Cashflows from financing activities
Proceeds from issue of shares, net of issue costs 101 - 707
Interest received on convertible loans 75 75 150
Payment of lease liabilities (6) - -
Net cash generated by financing activities 170 75 857
Net decrease in cash and cash equivalents (212) (396) (191)
Cash & cash equivalents at the beginning of the period 526 717 717
Cash & cash equivalents at the end of the period 314 321 526
Notes to the interims accounts:
1. Basis of preparation
This interim consolidated financial information for the six months ended 30
September 2024 has been prepared in accordance with AIM rule 18, 'Half yearly
reports and accounts'. This interim consolidated financial information is not
the group's statutory financial statements within the meaning of Section 434
of the Companies Act 2006 (and information as required by section 435 of the
Companies Act 2006) and should be read in conjunction with the annual
financial statements for the year ended 31 March 2024, which have been
prepared under UK-adopted International Accounting Standards (IFRS) and have
been delivered to the Register of Companies. The auditors have reported on
those accounts; their report was unqualified, did not include references to
any matters to which drew attention by way of emphasis of matter without
qualifying their report and did not contain any statements under Section 498
(2) or (3) of the Companies Act 2006.
The interim consolidated financial information for the six months ended 30
September 2024 is unaudited. In the opinion of the Directors, the interim
consolidated financial information presents fairly the financial position, and
results from operations and cash flows for the period. Comparative numbers for
the six months ended 30 September 2023 are also unaudited.
3. Availability
Copies of the interim report will be available from the Distil's registered
office at 201 Temple Chambers, 3-7 Temple Avenue, EC4Y 0DT and also on
www.distil.uk.com (https://www.distil.uk.com/) .
4. Approval of interim report
This interim report was approved by the board on 4 November 2024.
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