Distil returns to revenue growth, operating loss widens

12th Jun 2024 13:02

(Sharecast News) - Premium spirits company Distil reported a return to revenue growth in its final results for the year ended 31 March on Wednesday, although its operating loss widened.

The AIM-traded firm, which owns brands including RedLeg Spiced Rum, Blackwoods Gin and Vodka, Blavod Black Vodka, TRØVE Botanical Spirit and Diva Vodka, recorded a 15% increase in turnover to £1.52m, up from £1.32m in 2023.

Gross profit also rose, by 8% to £0.74m, while volumes increased 8%.

However, margins decreased to 48% from 52% in the prior year, while advertising and promotion expenditure was reduced by 12% to £0.52m.

The company reported an operating loss of £1.09m, compared to a loss of £0.8m a year earlier.

Its net cash outflow was £0.19m, significantly lower than the £0.85m outflow in 2023, resulting in year-end cash reserves of £0.53m.

Net assets were recorded at £6.37m, down from £6.8m the previous year.

Operational highlights included a strategic partnership with Global Brands to service major UK off-trade customers and significant wins for RedLeg and Blackwoods in the UK on-trade market, including cocktail listings in major national venue groups.

Export growth saw a 21% year-on-year increase in value, supported by market-specific activations.

The launch of the first RedLeg Limited Edition bottling drove substantial sales increases across grocery channels during the Christmas period.

Additionally, Distil took control of the Blackwoods brand home at the Ardgowan distillery site to implement a brand home fit-out and saw a return to Brighton for RedLeg with sponsorship of a key event and distribution drive.

The company also achieved a 39% reduction in logistical costs.

"I am pleased to report that despite challenging market conditions, Distil has posted double-digit year-on-year sales growth for the 2024 financial year," said executive chairman Don Goulding.

"Across the total UK spirits trade, volumes have declined as consumers cut back in response to economic pressures, including the duty increase in August 2023.

"This represented the largest duty increase in 50 years and sees spirits remaining at twice the headline rate of inflation, despite a slowdown in overall inflation rates in recent months."

Goulding said that as the company looked towards the coming year, it was encouraged to see that the market was showing early signs of recovery.

"We are working closely with our distribution partners in the UK and export markets to ensure that we are well positioned and have increased our marketing activity at a consumer level to stimulate further growth.

"I am confident that we will be able to continue to build on the success of 2024 as we move into the new financial year and deliver another year of growth for shareholders."

At 1055 BST, shares in Distil were up 5.16% at 0.5p.

Reporting by Josh White for Sharecast.com.