REG - Distil PLC - Interim results for the 6m ended 30 Sept 2023
12/10/2023 07:00
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RNS Number : 8533P Distil PLC 12 October 2023
Distil plc
("Distil", the "Company" or the "Group")
Interim Results for the six months ended 30 September 2023
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
2023.
Operational highlights:
· Production of RedLeg Limited Edition bottle,
available from October
· Sales and marketing drive for RedLeg in Brighton,
including exclusive rum sponsorship of city-wide event increased distribution
in the city by 179% in the lead-up to the event
· Further consumer brand activation at Taste of
London over the summer with 55,000 attendees
· Launch of RedLeg ecommerce site driving brand
visibility and a new revenue stream with attractive margins
· Additional on-trade listings secured for RedLeg
and Blackwoods Gin and Vodka
Financial highlights:
· Turnover increased by 37% to £632k (2022:
£460k)
· Gross profit increased by 35% to £283k (2022:
£210k)
· Volumes (litres) increased by 48%
· Investment in brand marketing and promotion
decreased by 58% to £159k (2022: £376k)
· Administrative costs increased by 12% to £489k
(2022: £436k)
· Loss before tax of £314k (2022: £555k)
· Cash reserves at period end of £321k (2022:
£948k)
Don Goulding, Executive Chairman, commenting on these results said:
"The first six months of this financial year have enabled us to embrace the
autonomy that the business remodel in H1 2022 was designed to afford, and I'm
pleased to report that the business has returned to growth.
The period has been marked with consumer-facing brand activation, new product
development and encouraging progress re-establishing our portfolio within the
on-trade with the help of our partners at Marussia Beverages UK.
H1 has not been without its challenges, as the business continues to face
wide-spread cost of goods increases in response to inflation and the war in
Ukraine, as well as a UK duty increase on all alcoholic beverages. Reflecting
the economic climate, consumers globally remain cautious, the impact of which
is being felt in the trade and is expected to continue in the short to medium
term.
However, despite this, our year-on-year results are encouraging. We are
rebuilding from a stronger base under the new structure, and the team is
working diligently to ensure that we are well positioned to continue this
growth as we enter our busiest trading period."
Executive Chairman's Statement
H1 results show double-digit growth year-on-year, which reflects that, despite
the economic backdrop, we are continuing to rebuild following the business
remodel in H1 2022.
The full effects of consumer reaction to duty increases in the UK, which went
live from 1 August, are yet to be seen, however we have been working closely
with our customers to ensure that our brands remain well positioned and
marketed to demonstrate true value to consumers and minimise the effects of
the changes on our business.
The market remains uncertain due to the economic climate, particularly in the
UK, however we remain excited by the opportunities presented by the business
remodel, and focused on continuing to grow our brands from a stronger base in
both the UK and export markets to drive value for our shareholders.
Operations
Our operations team has continued to work closely with both existing and new
suppliers to reduce our cost of goods following significant increases in
response to inflation and the conflict in Ukraine. We anticipate continued
cost pressures in the short to medium term, however we expect to begin to see
the benefits of the reductions secured through this close collaboration from
H2 onwards.
Reducing the environmental impact of the business remains a priority, and the
team is working closely with partners at all stages of the supply chain to
minimise emissions and wastage.
Marketing and New Product Development
Investment into brand marketing and promotion decreased 58% as we lapped H1
2022 which included the RedLeg TV commercial. However, the remodel in 2022 has
given us greater control of our marketing investment, and as a result, this
summer we were able to activate RedLeg directly with consumers at two key
events with a combined total of 135,000 attendees.
Activation in Brighton for the brand gave us a platform on which to rebuild
on-trade distribution, increasing listings by 179% over the month leading up
to the event, and we hope to continue to build on this success for the rest of
the year and beyond. Taste of London in Regent's Park saw a fully branded
RedLeg pop-up activation, with the full range showcased in a variety of serves
over the course of the 5-day event, driving revenue across the brand. Event
marketing will continue to be a focus for our brands moving forward to drive
awareness and consumer trial.
These events coincided with the launch of the RedLeg ecommerce site, selling
directly to consumers online. This provides a new revenue stream and platform
on which to launch new products and branded merchandise, delivering additional
volume at attractive margins.
The RedLeg Limited Edition bottle will be the first line extension to be
launched onto the site. Following development and trials with our partners,
the first batch was bottled in September and is now available to purchase
online and from major grocery. We are confident that the product will have
great stand-out on shelf, and are delighted to be able to offer something new
to consumers. More information and images can be found at
www.distil.uk.com/news.
Alongside the RedLeg Limited Edition bottle, the team has been working to lay
the groundwork for new product development, which will include both line
extensions and new-to-world brands in lucrative new categories for the
business. We look forward to sharing more details with shareholders in the
second half of the year.
Exports
Export continues to be a key area for the business and H1 saw combined sales
of Blackwoods gin and vodka increase 125% year-on-year. This has been driven
by existing customers repurchasing following market recovery post-covid. We
have received resoundingly positive feedback on the 2022 vintage; customers
are excited by the refreshed branding and liquid, and development of the brand
home.
Similarly, we are regaining traction for Blavod within export markets,
tracking an increase of 102% year-on-year, driven predominantly by Duty Free
as consumer confidence in travel returns.
Ardgowan Distillery Project
Ardgowan Distillery Company hosted its first annual Open Day in June at the
distillery site in Inverkip, with representatives from Distil in attendance.
Ardgowan reported 5,000 visitors on the day from the local area and as far
afield as the USA. Response on the day was resoundingly positive, and the
Blackwoods range continues to be a hit, with visitors returning to repeat
purchase at the distillery shop. More information regarding the Open Day can
be found here. More information and images can be found at
www.distil.uk.com/news.
Commissioning of the gin still has been delayed due to the need to change some
of the instruments, however we are working closely with the team to monitor
progress with the aim of distilling the first Blackwoods at Ardgowan as soon
as possible.
Results versus same period last year
Despite a difficult economic backdrop total revenues increased 37% to £632k
during the period as we rebuilt following the business remodel in H1 2022.
Revenue growth is behind volume (+48% year-on-year), largely due to sizable
increase on Blavod exports (+102% year-on-year) driven by license sales in
travel retail.
The Company reduced the loss before tax by 43% to £314k for the period (2022:
£555k) despite continued pressure on gross margins caused by increased
production costs. Advertising and marketing spend was significantly below
prior period which included one-off costs associated with the RedLeg TV
campaign. Other administrative costs increased 12% over the prior period
primarily due to an increase in staff and professional costs.
Cash reserves stood at £321k at the end of the period reflecting the losses
incurred during the period, and build-up in inventory ahead of Q3, our largest
and most profitable trading period.
Outlook
We are confident we will continue to build on promising wins within both the
UK on-trade and export markets for the remainder of the year, demonstrating
that we are successfully rebuilding from a stronger position.
Amidst a demanding economic climate and shifting consumer behaviours, the
global alcohol market is projected to continue to grow +2% in value
year-on-year from 2022-2027 (IWSR).
We anticipate that rum category growth in the UK trade (+63% volume vs 4 years
ago, off-trade) will continue, and the team is working to ensure that RedLeg
Spiced Rum remains well positioned in line with consumer needs, and is
supported with cross-trade channel marketing support in order to benefit from
the upward trend.
We head into our biggest trading period having implemented price
premiumisation across the portfolio and as a result of this, coupled with the
work of the operations team to reduce cost of goods, we anticipate that we
will begin to recover margins.
H2 will see the launch of the new limited-edition SKU for RedLeg, the
development of further new product development for both existing and
new-to-world brands to diversify our offering, and increased marketing and
promotional support internationally to drive growth across our portfolio
through to the end of the financial year.
For further information please contact:
Distil plc
Don Goulding Executive Chairman Tel: +44 203 283 4007
SPARK Advisory Partners Limited (NOMAD)
Neil Baldwin Tel +44 203 368 3550
Mark Brady
Turner Pope Investments (TPI) Limited (Broker)
Andy Thacker / James Pope Tel +44 20 3657 0050
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, gin, vodka vanilla cream liqueur 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 2023 Six months ended 30 September 2022 Year
ended 31 March 2023
Un-audited Un-audited Audited
£'000 £'000 £'000
Revenue 632 460 1,320
Cost of sales (349) (250) (636)
Gross profit 283 210 684
Administrative expenses:
Advertising and promotional costs (168) (376) (582)
Other administrative expenses (489) (436) (903)
Share based payment expense (17) (30) (3)
Total administrative expenses (674) (842) (1,488)
Operating loss (391) (632) (804)
Finance income 77 77 150
Loss before tax from continuing operations (314) (555) (94)
Income tax - - -
Loss for the period (314) (555) (748)
Loss per share:
From continuing operations
Basic (pence per share) (0.05) (0.08) (0.11)
Diluted (pence per share) (0.05) (0.08) (0.11)
Consolidated interim statement of financial position
As at 30 September 2023 As at 30 September 2022 As at 31 March 2023
Un-audited Un-audited Audited
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 150 159 153
Intangible fixed assets 1,648 1,613 1,633
Financial assets 3,000 3,038 3,000
Deferred tax assets 351 445 351
Total non-current assets 5,149 5,255 5,137
Current assets
Inventories 1,189 793 1,069
Trade and other receivables 479 586 883
Cash and cash equivalents 321 948 717
Total current assets 1,989 2,327 2,669
Total assets 7,138 7,582 7,806
LIABILITIES
Current liabilities
Trade and other payables 483 410 854
Financial liabilities 150 150 150
Total current liabilities 633 560 1,004
Total liabilities 633 560 1,004
Net assets 6,505 7,022 6,802
EQUITY
Equity attributable to equity holders of the parent
Share capital 1,474 1,474 1,474
Share premium 6,211 6,211 6,211
Share based payment reserve 218 228 201
Accumulated losses (1,398) (891) (1,084)
Total equity 6,505 7,022 6,802
Consolidated interim cash flow statement
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
Un-audited Un-audited Audited
Cashflows from operating activities £'000 £'000 £'000
Loss before tax (314) (555) (654)
Adjustments for non-cash/non-operating items:
Finance income (77) (77) (150)
Depreciation 8 8 16
Share based payment expense 17 30 3
Unrealised foreign currency gains 2 - -
(364) (594) (785)
Movements in working capital
Increase in inventories (120) (156) (432)
Decrease/(increase) in trade receivables 404 101 (196)
(Decrease)/increase in trade payables (371) 3 447
Cash used in operations (87) (52) (181)
Net cash used in operating activities (451) (646) (966)
Cashflows from investing activities
Purchase of property plant & equipment (5) - (2)
Expenditure relating to the acquisition and registration of licenses and (15) (7) (27)
trademarks
Net cash used in investing activities (20) (7) (29)
Cashflows from financing activities
Interest received on convertible loans 75 38 150
Net cash generated by financing activities 75 38 150
Net decrease in cash and cash equivalents (396) (615) (845)
Cash & cash equivalents at the beginning of the period 717 1,563 1,562
Cash & cash equivalents at the end of the period 321 948 717
Notes to the interims accounts:
1. Basis of preparation
This interim consolidated financial information for the six months ended 30
September 2023 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 2023, 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 2023 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 2022 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 (http://www.blavodwinesandspirits.com/) .
4. Approval of interim report
This interim report was approved by the board on 11 October 2023.
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