REG - Distil PLC - Trading Update

DistilAnnouncement

15/01/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250115:nRSO3330Ta&default-theme=true

RNS Number : 3330T  Distil PLC  15 January 2025

Distil PLC

Trading Update

 

Distil plc (AIM: DIS), owner of premium drinks brands including RedLeg Spiced
Rum, Blackwoods Gin and Vodka, and Blavod Black Vodka, issues a trading update
for the last quarter (October - December 2024).

 

Unaudited year-on-year third quarter (October to December 2024) results:

 

·    Revenues decreased 59% to £233k (October to December 2023: £571k)

o Lapping exceptional 39% growth Q3 2023 in a market which was declining

·    Volumes decreased 56%

·    Gross margins decreased 6 percentage points to 42% (October to
December 2023: 48%)

o Due to fixed costs remaining constant

·    Advertising and promotional spend decreased 55%, reflective of slower
rate-of-sale in stores

 

Don Goulding, Executive Chairman of Distil, commented:

 

"Market conditions continue to be tough across the spirits industry,
particularly in the UK, and our business has suffered as part of this, with Q3
sales declining by the same rate as reported in the interims.

 

Although we continue to maintain distribution within major customers, stock
purchase phasing has shifted versus the prior year, in which we saw large
orders in November and December filling pipelines through Spring. In
comparison, this year those major customers have been more cautious, reducing
stock cover by an additional 20%. With reduced stock overhang versus the
previous year in Q4, we expect orders to continue more steadily through to the
year-end.

 

In addition, rate of sale at retail store level was suppressed, continuing the
trend we've seen in previous months, as consumers' spending continues to be
stretched, with own label and aggressive discounting winning basket share. We
are working with our partner, Global Brands, to define strategies to increase
sales through Q4.

 

The UK on-trade also suffered during Q3. CGA data shows that spirits retail
value over the seven days to Saturday 28 December fell -4% YoY, with volumes
falling significantly above this number as consumers opted for longer drinks
such as beer and cider, which are perceived to offer better value for money.

 

In response to these challenging market conditions, and in order to ensure we
are putting our brands in the best position for growth, we will be moving our
full UK distribution, including the on-trade, to long-term partners, Global
Brands, who have been producing and successfully selling the RedLeg
ready-to-drink can since 2019. The Global Brands portfolio, which includes VK,
Hooch, and Franklin & Sons, alongside third-party brands Shanky's Whip and
American Beverage Marketers (ABM), offers important synergies with Distil
brands in terms of target consumers and trade accounts.

 

Utilising its larger sales force (approximately 4x the size of previous
partners) which has strong relationships with national accounts, and
proprietary logistics and warehouse capabilities, the extension of this
partnership offers the opportunity to work closely with a longstanding partner
to accelerate brand growth.

 

Beyond the UK, we're working closely with customers in key existing markets,
as well as pursuing new markets to ensure that we are maximising opportunities
for growth within export.

 

The medium-term macro-outlook continues to be challenging, as the overall
spirits market remains soft in response to increased pressures on consumer
spending and further duty increases in the UK. However, we are confident that
the extended partnership with Global Brands will put our brands in the best
position within the market and offer important opportunities for growth across
the portfolio, and we are working to mitigate the impact on the full-year."

 

For more information:

 

 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 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  TSTFLFVALAISLIE