REG - Distil PLC - Trading Update

DistilAnnouncement

13/04/2023 07:00

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RNS Number : 0229W  Distil PLC  13 April 2023

 

DISTIL PLC

 

Trading Update

 

 

Distil plc (AIM: DIS), owner of premium drinks brands RedLeg Spiced Rum,
Blackwoods Gin and Vodka, Blavod Black Vodka, TRØVE Botanical Spirit and Diva
Vodka, is pleased to provide an update on trading following the end of its
financial year on 31 March 2023.

 

Unaudited year-on-year Q4 (January - March 2023) highlights:

 

·    Volumes decreased 40%

·    Revenues decreased 37%

·    Investment into advertising and promotions decreased 66%

·    Cash reserves of £515k at 31 March

 

Don Goulding, Executive Chairman of Distil, said:

 

"Although fourth quarter results are down year-on-year, the quarter has
delivered the strongest trading performance during the financial year.
Unaudited full year revenue sits slightly below market expectations at £1.32M
(FY2022: £2.94M (audited)), whilst unaudited full year loss before tax is
higher at £0.71M (FY2022: £95K (audited)).

 

Quarterly performance was suppressed due to reduced promotional activity in UK
major grocery as a result of the transition away from distributor management.
The quarter also saw us lapping particularly strong export sales last year, as
we opened significant new markets and saw the benefit of associated pipe-fill
sales.

 

Despite this, the outlook for the coming financial year is positive. Q4
delivered the strongest revenues of the financial year, indicating that we are
successfully rebuilding following the business remodel in the first half of
the year. It has been a transitional year for the business - there was a
bigger job to be done than anticipated due to larger volumes of stock
available in the trade than reported, however we are now through the issues
that this has caused in previous quarters, and trading well with direct
customers. We are confident that we will continue to build on this success and
begin to see the benefits of the remodel from Q1 FY23/24.

 

Driving growth through export has remained a focus this quarter, and we're
pleased to have opened new markets in Europe, with interest from markets
further afield being nurtured across the portfolio. Expanding and
strengthening our global brand footprint will play a pivotal role for the
business going forward into FY23/24, both in terms of revenues and margin.

 

Management of operations and cost of goods also remains a priority across our
brands as we're faced with double-digit price increases from suppliers in
reaction to inflation. The team is working hard to mitigate these increases
and reduce our costs moving forward.

 

Alongside building programmes to strengthen our existing brands, the quarter
has seen us lay the groundwork on which to create innovative new-to-world
products in response to consumer trends, including a blended malt whisky in
accordance with our partnership with Ardgowan, which has a H2 target launch.
The team will be working diligently over the coming months to bring the new
brands to market, and we look forward to sharing more detail with shareholders
in due course.

 

Progress remains positive at the Ardgowan site, with internal renovation works
to the gin building complete, and the still due for installation in May. The
team is working closely with Ardgowan to design the visitor experience, with
plans to invite trade later this year once works have progressed further
across the wider site.

 

This year has been challenging due to the short-term effect of the business
remodel, taking control of the major retailers internally, and moving our UK
on-trade business to Marussia Beverages. This decision was carefully
considered by the Board, and we remain confident that the decision will yield
significant revenue upside from the next financial year onwards.

 

We are entering the new financial year in a good cash position, with reserves
of £515K. We will continue to focus on driving revenue and reinvesting
profits into building our brands and have a strong promotional plan in place
with UK grocers, as well as an additional programme of multi-channel marketing
activity in the UK and key export markets to accelerate sales.

 

The business is well positioned to build and grow value for customers,
shareholders, and other stakeholders in the next financial year and beyond.
Market guidance for FY23/24 will be issued at the time of our final results
announcement in June."

 

For further information:

 

 Distil PLC
 Don Goulding, Executive Chairman            Tel +44 (0)203 405 0475

 Shaun Claydon, Finance Director
 SPARK Advisory Partners Limited (NOMAD)
 Neil Baldwin                                Tel +44 20 3368 3550

 Mark Brady
 Turner Pope Investments (TPI) Ltd (Broker)
 Andy Thacker                                Tel +44 20 3657 0050

 James Pope

 

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, TRØVE
Botanical Vodkas, Blavod Original Black Vodka and Diva Vodka.

 

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