REG - Distil PLC - Interim Results for the 6m ended 30 September 2022
13/10/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221013:nRSM7144Ca&default-theme=true
RNS Number : 7144C Distil PLC 13 October 2022
Distil plc
("Distil", the "Company" or the "Group")
Interim Results for the six months ended 30 September 2022
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
2022.
Operational highlights:
· Major move from UK Distributor to a new business
model
· Relationship with major UK retail customers taken
under direct control
· Significant reduction in UK market stock cover
associated with removal of distributor
· Commercial Director appointed to manage major
retail and exports to deliver ambitious growth plans
· Appointment of leading distributor to service the
UK hospitality sector
· RedLeg TV advertisement developed and tested in
two key regions
· Major listing for RedLeg Tropical with leading
pub group
· New export market opened in Scandinavia
· Blackwoods Gin & Vodka Distillery and visitor
centre at the Ardgowan site on track to open Spring 2023
Financial highlights:
· Turnover decreased by 68% to £0.46 million
(2021: £1.44 million)
· Gross profit decreased by 74% to £210k (2021:
£794k)
· Volumes (litres) decreased by 72%
· Investment in brand marketing and promotion
decreased by 6% to £376k (2021: £398k)
· Administrative costs increased by 29% to £436k
(*2021: £338k)
· Adjusted** Operating loss of £602k (2021: £58k
profit)
· Loss before tax of £555k (2021: £45k loss)
· Cash reserves*** at period end of £0.95 million
(2021: £4.22 million (£1.02 million excluding funds raised for, and applied
to, Ardgowan investment))
* Administrative costs for the prior period adjusted to remove one-off
transaction costs associated with the Ardgowan investment.
** Operating loss for the prior period adjusted for one-off transaction costs
associated with the Ardgowan investment and for both periods for share-based
payment expense.
*** Prior period cash reserves include proceeds from the fundraising completed
in August 2021 amounting to £3.20 million (before expenses), of which £3
million was invested in Ardgowan by way of a convertible loan.
Don Goulding, Executive Chairman, commenting on these results said:
"The first six months of this financial year have seen major changes to our
business model and the creation of a stronger platform for accelerated future
growth.
The key change year-on-year is our decision to take direct control of
relationships with our major UK retail customers, and to move away from our
previous distributor, Hi-Spirits, managing our entire UK trade. From
mid-September we transitioned to a hybrid model, which sees direct sales to
our largest retail customers supported by a new, highly effective distributor,
Marussia Beverages Group, covering hospitality, wholesale and other sectors
where we are currently underdeveloped and have an opportunity for new growth.
To support this significant development, we appointed a Commercial Director to
navigate the restructure and create new relationships with our major
customers, broaden our on-trade distribution, and advance our international
export network. The strengthening of our commercial operation will also
support our drive for new product development.
While the remodel has seen a one-off hit to the half year figures as we
transition, we are confident that this move will put Distil in a stronger
position from which to accelerate future growth"
Executive Chairman's Statement
We are grateful to our UK distributor for helping us build our distribution
platform especially in the off trade but, after several years with our chosen
partner, we decided it was the right time to create a hybrid distribution
platform which would facilitate the next phase of accelerated brand
development and growth. We subsequently took direct control of relationships
with our largest retail stockists in late September. This was made possible by
the appointment of our Commercial Director who joined us in June and played an
important role in selection of, and transition to, the right partner to
broaden our list of stockists in the on-trade, online and premium retail. We
subsequently began our distribution partnership with Marussia Beverages Group
in September, and early signs are most encouraging.
This new business model has led to an associated reduction of stock in trade
with little or no 'pipeline' replenishment into the UK distributor for almost
four months as we worked through a contractual notice period and existing
warehouse inventories were depleted. This has caused a sizeably negative hit
to sales out from Distil, however there has been no real effect on actual
consumer sales.
H1 also saw the launch of the first TV advertising campaign for RedLeg Spiced
Rum in collaboration with ITV Adventures. The campaign, valued at over
£500,000, ran on linear channels in two targeted regions and nationally
across ITV Video-On-Demand services. Focused around bringing the RedLeg crab
logo to life, the creative was named Ad of the Week in a leading trade
publication and has already begun to deliver positive results for the brand.
The Company views this initial test as the first step towards a robust
above-the-line plan to accelerate brand growth.
Our priority remains settling our brands into the new distribution platform
and restoring the momentum previously enjoyed with accelerated future growth.
Operations
Our operations team has continued to work well by keeping average year-on-year
cost increases, per case, down to single digit figures despite increased
energy costs, general inflationary pressures, and staff shortages throughout
the supply chain, storage and freight. This has been managed through sourcing
new suppliers and procurement consolidation.
We anticipate continued cost pressure in the short to medium-term and will
maintain our efforts to mitigate price inflation.
Sustainability is increasingly becoming an important purchasing consideration
for both consumers and trade customers alike. Over the past six months, our
team has been working closely with suppliers at all stages of the chain in
order to reduce the environmental impact of our brands. This includes sourcing
the latest technologies and materials for closures, and exploring new
sustainable substrates with our label suppliers. Sustainability will continue
to be a key focus across our brands moving forward.
Ardgowan Distillery Project, Blackwoods distillery and visitor centre
Site clearance work began earlier in the year as planned and the building for
Blackwoods Gin & Vodka distillery and visitor experience is now taking
shape, with an anticipated opening in Spring 2023. Photos are available on the
Distil website.
Good progress is also being made by the Ardgowan team on its whisky
distillery, which remains on-track for a scheduled 2024 opening.
The Ardgowan Distillery project ambition is to become the most CO2 efficient
distillery in the Scotch Whisky industry, and Blackwoods will play a key role
on site.
The option remains for Distil to invest a further £2m into the Ardgowan
project and the team is working closely with Ardgowan to move this forward.
Results versus same period last year
Total revenues fell 68% to £0.46 million against the prior period, with UK
sales adversely impacted by the removal of inventory from the distributor
supply chain as we transitioned away from our UK distributor and to direct
sales during Q2. The one-off negative impact on H1 sales of this change
amounted to £0.67 million inventories depletions and £0.3million reduced
promotional activity in the period leading to distributor contract
termination. The transition to direct sales was complete at the end of
September and we do not anticipate any further significant impact on sales in
the second half of the current financial year attributable to the transition.
The Company sustained an operating loss (after adjusting for share-based
payment expense) of £602k (2021: £58k profit after adjusting for share-based
payment expense and one-off transaction costs associated with the Ardgowan
investment).
Cash reserves stood at £0.95 million at the end of the period compared to
£4.22 million at the end of the prior period, which included proceeds of
£3.20 million (before expenses) from the fundraising completed in August
2021, of which £3 million was invested in Ardgowan by way of a convertible
loan .
Outlook
The past six months have seen one-off impacts to the business. However, we are
seeking to return to sales growth in seasonally stronger H2 and continue that
growth into the next financial year and beyond as our new business model
delivers additional stockists, new markets, and our marketing focus delivers
strong campaigns and new products.
Rebuilding distribution across our brands is a key priority, and we have seen
encouraging early results, having recently added new on-trade listings,
including a major pub group, as well as new export markets, both of which will
come through from October onwards.
The spirits market continues to perform well in the UK, with value +14% vs 3
years ago (Data: WSTA). The rum category in particular is showing good growth,
reaching £1bn in sales and having overtaken whisky in the UK on trade in the
first half of this year. RedLeg Spiced Rum is positioned in line with consumer
needs, and our new partnership with Marussia Beverages UK will ensure we are
well placed to benefit from market trends.
In addition to the appointment of a Commercial Director, we have subsequently
appointed a new Marketing Director and a Head of Finance & Operations
which will further strengthen our team and broaden our capabilities.
The current political and economic uncertainties are likely to see consumers
shopping for true value in both on and off trade outlets, especially over the
peak Christmas trading period and through Spring next year. Our brands are
well positioned in this regard, and we aim to maintain a strong promotional
support programme across all trade sectors. We anticipate full year
performance for the year ending 31 March 2023 to be in line with current
market expectations.
For further information please contact:
Distil plc
Don Goulding Executive Chairman Tel: +44 203 283 4007
Shaun Claydon, Finance Director
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
Distil plc - Half Year Results
Consolidated comprehensive interim income statement
Six months ended 30 September 2022 Six months ended 30 September 2021 Year
ended 31 March 2022
Un-audited Un-audited Audited
£'000 £'000 £'000
Revenue 460 1,435 2,942
Cost of sales (250) (641) (1,313)
Gross profit 210 794 1,629
Administrative expenses:
Advertising and promotional costs (376) (398) (890)
Other administrative expenses (436) (410) (812)
Share based payment expense (30) (30) (59)
Total administrative expenses (842) (838) (1,761)
Operating loss (632) (44) (132)
Finance income 77 - 37
Finance expense - (1) -
Loss before tax from continuing operations (555) (45) (95)
Income tax - 65 269
(Loss)/profit for the period (555) 20 174
(Loss)/profit per share:
From continuing operations
Basic (pence per share) (0.08) 0.01 0.03
Diluted (pence per share) (0.08) 0.01 0.02
Consolidated interim statement of financial position As at 30 September 2022 As at 30 September 2021 As at 31 March 2022
Un-audited Un-audited Audited
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 159 167 167
Intangible fixed assets 1,613 1,602 1,606
Financial assets 3,038 3,000 3,000
Deferred tax assets 445 241 445
Total non-current assets 5,255 5,010 5,218
Current assets
Inventories 793 542 637
Trade and other receivables 586 674 687
Cash and cash equivalents 948 4,215 1,562
Total current assets 2,327 5,431 2,886
Total assets 7,582 10,441 8,104
LIABILITIES
Current liabilities
Trade and other payables 410 512 407
Financial liabilities 150 3,000 150
Total current liabilities 560 3,512 557
Total liabilities 560 3,512 557
Net assets 7,022 6,929 7,547
EQUITY
Equity attributable to equity holders of the parent
Share capital 1,474 1,308 1,474
Share premium 6,211 5,964 6,211
Share based payment reserve 228 147 198
Accumulated losses (891) (490) (336)
Total equity 7,022 6,929 7,547
Consolidated interim cash flow statement
Six months ended 30 September 2022 Six months ended 30 September 2021 Year ended 31 March 2022
Un-audited Un-audited Audited
Cashflows from operating activities £'000 £'000 £'000
Loss before tax (555) (45) (95)
Adjustments for non-cash/non-operating items:
Finance income (77) - (37)
Depreciation 8 8 16
Share based payment expense 30 30 59
Expenses settled by shares - - 15
(594) (7) (42)
Movements in working capital
(Increase)/decrease in inventories (156) 11 (84)
Decrease/(increase) in trade receivables 101 (65) (78)
Increase in trade payables 3 154 54
Cash (used in)/generated by operations (52) 100 (108)
Net cash (used in)/generated by operating activities (646) 93 (150)
Cashflows from investing activities
Purchase of property plant & equipment - (8) (16)
Expenditure relating to the acquisition and registration of licenses and (7) (4) (8)
trademarks
Payment on issue of convertible loan notes
- - (2,850)
Net cash used in investing activities (7) (12) (2,874)
Cashflows from financing activities
Proceeds from issue of shares - 3,072 3,492
Interest received on convertible loans 38 - 32
Net cash generated by financing activities 38 3,072 3,524
Net (decrease)/increase in cash and cash equivalents (615) 3,153 500
Cash & cash equivalents at the beginning of the period 1,563 1,062 1,062
Cash & cash equivalents at the end of the period 948 4,215 1,562
Notes to the interim accounts:
1. Basis of preparation
This interim consolidated financial information for the six months ended 30
September 2022 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 2022, 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 2022 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 2021 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 12 October 2022.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR MTBPTMTTBBBTRecent news on Distil
See all newsREG - Distil PLC - Holding(s) in Company
AnnouncementRCS - Distil PLC - ARDGOWAN DISTILLERY ANNOUNCES CEO APPOINTMENT
AnnouncementREG - Distil PLC - Announcement of U.S. distribution partnership
AnnouncementREG - Distil PLC - Holding(s) in Company
AnnouncementREG - Distil PLC - Holding(s) in Company
Announcement