TIDMDIS
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 GBP632k (2022: GBP460k)
-- Gross profit increased by 35% to GBP283k (2022: GBP210k)
-- Volumes (litres) increased by 48%
-- Investment in brand marketing and promotion decreased by 58%
to GBP159k (2022: GBP376k)
-- Administrative costs increased by 12% to GBP489k (2022: GBP436k)
-- Loss before tax of GBP314k (2022: GBP555k)
-- Cash reserves at period end of GBP321k (2022: GBP948k)
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 GBP632k 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 GBP314k for
the period (2022: GBP555k) 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 GBP321k 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 Six months Year
ended 30 ended 30 ended
September September 31 March
2023 2022 2023
Un-audited Un-audited Audited
GBP'000 GBP'000 GBP'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 As at As at
30 September 30 September 31 March
2023 2022 2023
Un-audited Un-audited Audited
GBP'000 GBP'000 GBP'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 Six months Year ended
ended 30 ended 30 31 March
September September 2023
2023 2022
Un-audited Un-audited Audited
Cashflows from operating activities GBP'000 GBP'000 GBP'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 trademarks (15) (7) (27)
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 .
4. Approval of interim report
This interim report was approved by the board on 11 October
2023.
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END
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