TIDMDIS
RNS Number : 3961R
Distil PLC
29 June 2020
The following replaces the notice released 29 June 2020 at
07:00, RNS Number 2886R . The 2020 'earnings per share' figure
presented within the 'Consolidated statement of comprehensive
income' table has been amended from 0.04p to 0.05p, all other
details remain the same. The full amended text appears below.
Distil plc
("Distil" or the "Group")
" Driving growth from our core brands and new products"
Distil (AIM: DIS), owner of premium drinks brands including
Blackwoods Gin and Vodka, RedLeg Spiced Rum, Blavod Black Vodka,
Diva Vodka and Jago's Vanilla Cream Liqueur, announces its final
results for the year ended 31 March 2020.
Operational review
-- RedLeg Pineapple Rum successfully launched and performing strongly
-- Ready-to-drink ("RTD") RedLeg Spiced Rum and Franklins 1886
Cola launched and listed in major UK national retailer
-- Mardi Gras trademark secured in Europe and USA
-- Implementation of improvements to the structure and capability of New Product Development
-- UK blending and bottling successfully relocated
-- New markets opened in Czech Republic, Canada, Africa, Middle East and Russia
-- Operational measures taken to protect our business and
employees as a result of COVID-19, including remote working,
advancement of production and retention of an additional bottling
plant to ensure continuity of supply
Financial review
-- Turnover increased 2% to GBP2,441k from GBP2,401k
-- Gross profit increased 1% from GBP1,429k to GBP1,446k
-- Margins broadly flat at 59.2% for the same period, year-on-year (2019: 59.5%)
-- Advertising and promotion spend decreased 3% from GBP688k to GBP665k
-- Other administrative expenses increased by 3%
-- Operating profit increased 15% from GBP160k to GBP184k
-- Net cash outflow of GBP210k (2019: GBP37k inflow) resulting
in year-end cash reserves of GBP858k (2019: GBP1.07m)
-- Net assets of GBP3.43m (2019: GBP3.17m) at 31 March 2020
Don Goulding, Executive Chairman of Distil, said:
" Our core brands and new products performed well in a highly
competitive market. Our operating profit grew year on year and we
remain in a strong cash position, debt free.
I am particularly pleased with the rum products we launched this
year as they gained traction with consumers in the UK and our key
international markets. Based on this success, we further
strengthened our new product development capability to benefit from
the opportunities that will naturally flow from new market
conditions.
In response to the Covid-19 related lockdown in all of our
markets, we remained agile and adapted well to market challenges
and closures. The excellent performance of our team ensured
continuity of supply throughout the period."
Distil PLC
Don Goulding, Executive Chairman Tel: +44 207 352 2096
Shaun Claydon, Finance Director
----------------------
SPARK Advisory Partners Limited
(NOMAD)
----------------------
Neil Baldwin Tel: +44 203 368 3550
Mark Brady
----------------------
Turner Pope Investments (TPI)
Ltd (Broker)
----------------------
Andy Thacker/Zoe Alexander Tel: +44 203 657 0050
----------------------
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Chairman's Statement
I am pleased to report another year of increased profit, revenue
growth and continued investment in our brands for the year ended 31
March 2020.
Performance
We closed the year in a strong position despite market turmoil
and global uncertainties created by the impact of COVID-19 in Q4.
I'm proud that our team responded rapidly and successfully to the
sudden shift in consumer demand, inventory disruption and trade
channel needs whilst adhering to government guidelines and working
from home. We were able to completely satisfy increases in demand
and maintain stock cover to reach agreed service levels. Our brands
were well supported by those trade channels which were fortunate
enough to remain open. Inventories of dry goods (bottles and
packaging) were increased as a precaution against potential supply
issues following UK lockdown and subsequent departure from the
EU.
Over the full year, sales revenue increased by 2% compared to
the prior year, which included export stock build by distributors
in anticipation of a possible hard Brexit in March 2019. Double
digit increases in RedLeg Spiced Rum were partly offset by a
decline in Blackwoods Gin sales as growth in the gin market
softened but particularly due to a reduction in distribution
through one UK retailer. Like for like sales of Blackwoods Gin in
remaining stockists increased year on year.
Marketing reinvestment rates in our key brands were broadly
maintained whilst our contribution margin increased to 32%.
Operating profit increased 15% from GBP160k to GBP184k. Our year
end cash reserves remained robust at GBP858k, down GBP210k year on
year following a surge in sales during Q4 and an associated
increase in trade debtors. Distil remains debt free.
Key Brands
The Flavoured Rum category is in growth and RedLeg Spiced Rum
continues to perform well within the sector despite increased
competition.
Independent market research from the drinks market analysis
company IWSR reports that RedLeg Spiced Rum achieved the highest
Cumulative Annual Growth Rate (CAGR) in volume and value in the UK
between 2013 and 2019 of any rum brand since its launch.
We launched our new variant, RedLeg Caramelised Pineapple Spiced
Rum, into our major markets during the summer of 2019 and now have
distribution in the UK, Australia, France and the Netherlands. The
brand has performed well so far and has brought new consumers into
the category. In September we also launched a ready-to-serve
format, 'RedLeg Spiced Rum & Franklin & Sons 1886 Cola' in
partnership with Global Brands. We are very pleased with consumers'
initial response to this new format and the product continues to
sell well. Distribution of our original Redleg Spiced Rum was also
launched in Canada and the Netherlands during the year.
Blackwoods 2017 Vintage Dry Gin performed well where stocked in
an overcrowded gin market. We took the decision to delay the
planned launch of our Blackwoods 2020 Vintage Dry Gin due to
complications surrounding COVID-19. Combined volume shipments to
the trade channels were down largely due to a range reduction at a
key customer. New export markets opened during the year included
Africa and the Middle East.
Depletions of Blavod Black Vodka slowed in Q4. Much of Blavod's
volume is via Duty Free or Travel Retail and international travel
was greatly reduced or prohibited. Diva Vodka sales increased
significantly, albeit off a small base, due to the opening of new
markets earlier in the year.
Productivity and cost management
Our cost of goods was well managed by the team despite general
price pressure across the board. Product by product we maintained
gross margins through accurate planning whilst maintaining or
improving product quality. Overheads increased by 3% overall,
primarily due to increased fees relating to audit, Nomad and other
AIM listing fees together with recruitment costs as we sought to
strengthen our marketing efforts and new product development.
Outlook
At the time of writing this report our key markets are beginning
to ease restrictions relating to the Coronavirus lockdown. We
anticipate these changes will be implemented gradually and will
vary by market or by region. Timing of a return to some kind of
normality is unclear.
Currently the On-Trade is yet to benefit from freedom of
movement. International travel and travel retail is greatly
reduced. The Off-Trade has benefited from the closure of bars and
restaurants and online retailing has soared. We fortunately operate
across all trade channels and our brands are well positioned at
affordable prices.
At this stage I believe it is too early to forecast with
accuracy or certainty for the coming year. Market guidance for the
coming year will be released as soon as we are reasonably confident
in consumer movement and trade channels reopening. In the meantime,
we will continue to keep tight control of cash, costs and ensure
product availability throughout the supply chain.
There is much discussion, speculation and planning around
'socially distanced' gatherings and events and the so called 'low
touch' economy which may arise post COVID-19. This will naturally
open up new opportunities with both customers and consumers alike
and we are well advanced with our plans to participate in these new
market conditions.
We continue to work on new product development, new packaging
and brand formats to support our customer needs longer term while
keeping our focus on rapidly changing trade needs in the short to
mid-term.
Don Goulding
Executive Chairman
Date: 26 June 2020
Strategic report
Results for the year
The profit before tax attributable to shareholders for the year
amounted to GBP182k (2019: GBP160k).
Overall sales revenue demonstrated further growth during the
year, supported by continued investment in marketing and
promotional spend which was marginally down on the prior year.
Sales volumes were broadly flat year-on-year.
Top line revenue growth has been maintained by another year of
strong performance from RedLeg Spiced Rum, sales of which were
enhanced by the launch of product extensions during the year. This
strong performance was partly offset by weaker year-on-year sales
of our Gin and Vodka brands against the backdrop of an expected
softening of the gin market, increasingly competitive markets, and
in the case of Blackwoods Gin, a reduction in volume sales caused
by a range reduction at a major retail customer.
The Group continues to minimise overheads where possible, whilst
ensuring sufficient investment to support the growth in sales of
its brands. Other administrative expenses increased by 3% over
prior year, largely due to investment in staff recruitment and cost
increases associated with the Group's AIM listing. The Group also
seeks to carefully manage its cash resources. Whilst the Group
posted a net cash outflow of GBP210k (2019: GBP37k inflow) during
the year, this was largely due to an increase in receivables during
the final month of the year, caused by a significant increase in
retail consumer demand. All of the receivables have since been
paid.
The Group's position at the financial year end remains robust
showing net assets of GBP3.43m (2019: GBP3.17m). This included cash
reserves of GBP0.86m (2019: GBP1.07m) and intangible assets of
GBP1.58m (2019: GBP1.56m) comprising expenditure on trademarks
related to our brands. Inventories increased to GBP349k (2019:
GBP312k) due to the planned increase in stock of raw materials to
mitigate any product supply disruption caused by the UK's departure
from the EU and UK lockdown resulting from the COVID-19
pandemic.
Against the backdrop of increasingly competitive and crowded
markets we have continued to invest in our core brands, expand
overall sales revenues and deliver another profitable set of
results in the current year.
Principal activities and business review
Distil Plc (the "Company") acts as a holding company for the
entities in the Distil Plc group (the "Group"). The principal
activity of the Group throughout the year under review was the
marketing and selling of RedLeg Spiced Rum, Blackwoods Gin and
Vodka, Diva Vodka and Blavod Black Vodka domestically and
internationally.
The results for the 2020 financial year reflect the continued
focus on investing in the Group's key brands to drive top line
growth in both domestic and international markets whilst ensuring
overhead costs remain appropriate for the size of the Group.
Key performance indicators
The Group monitors progress with particular reference to the
following key performance indicators:
-- Contribution - defined as gross margin less advertising and promotional costs
Contribution increased GBP40k from GBP741k in 2019 to GBP781k in
2020. This increase was achieved through an increase in overall
sales revenues and a 3% reduction in advertising and marketing
costs during the year.
-- Sales volume versus prior year
Total volumes were broadly flat year-on-year with strong growth
in RedLeg Spiced Rum volume sales of 24% offset by an overall
year-on-year decline in volume sales of Blackwoods Gin, Blavod
Black Vodka and Blackwoods Vodka.
-- Sales turnover versus previous year
Total sales increased 2% year-on-year to GBP2.44m. RedLeg Spiced
Rum continued to be the key performance driver posting a 26%
increase in revenue. Blackwoods Gin decreased 57% whilst Blackwoods
Vodka and Blavod Black Vodka experienced declines of 5% and 18%
respectively, both off a relatively small base.
-- Gross margin versus previous year
Gross margin as a percentage of sales was broadly flat during
the year at 59.2% compared to 59.5% in the prior year.
We also closely monitor both the level of, and value derived
from our advertising and promotional costs and other administrative
costs. Advertising and promotional costs decreased in absolute
terms by GBP23k from GBP688k to GBP665k. As a percentage of sales,
advertising and promotional spend amounted to 27% (2019: 29%)
during the year.
Other administrative costs marginally increased by GBP16k from
GBP581k to GBP597k as we continued to carefully manage our cost
base.
Principal risks and uncertainties
As a relatively small but growing business our senior management
is naturally involved day to day in all key decisions and the
management of risk. Where possible, structured processes and
strategies are in place to monitor and mitigate as appropriate.
This involves a formal review at Board level.
The directors are of the opinion that a thorough risk management
process has been adopted which involves a formal review of the
principal risks identified below. Where possible, processes are in
place to monitor and mitigate such risks.
-- Economic downturn
The success of the business is reliant on consumer spending. An
economic downturn, resulting in reduction of consumer spending
power, will have a direct impact on the income achieved by the
Group. In response to this risk, senior management aim to keep
abreast of economic conditions. In cases of severe economic
downturn, marketing and pricing strategies will be modified to
reflect the new market conditions.
-- High proportion of fixed overheads and variable revenues
A large proportion of the Group's overheads are fixed. There is
the risk that any significant changes in revenue may lead to the
inability to cover such costs. Senior management closely monitor
fixed overheads against budget on a monthly basis and cost saving
exercises are implemented wherever possible when there is an
anticipated decline in revenues.
-- Competition
The market in which the Group operates is highly competitive. As
a result, there is constant downward pressure on margins and the
additional risk of being unable to meet customer expectations.
Policies of constant price monitoring and ongoing market research
are in place to mitigate such risks.
-- Failure to ensure brands evolve in relation to changes in consumer taste
The Group's products are subject to shifts in fashions and
trends and the Group is therefore exposed to the risk that it will
be unable to evolve its brands to meet such changes in taste. The
Group carries out regular consumer research on an ongoing basis in
an attempt to carefully monitor developments in consumer taste.
-- Portfolio management
A key driver of the Group's success lies in the mix and
performance of the brands which form the Group's portfolio. The
Group constantly and carefully monitors the performance of each
brand within the portfolio to ensure that its individual
performance is optimised together with the overall balance of
performance of all brands marketed and sold by the Group.
-- Withdrawal of the UK from the EU
Following the UK's decision to leave the EU in 2016 we have
taken appropriate steps to minimise the likely impact of this
decision on our operations. We now source glass in the UK for all
our production in England and Scotland and, similarly, source glass
in Europe for our Blavod Black Vodka production in Germany.
We also invoice all of our sales in GBP thereby minimising our
exposure to currency fluctuations. In view of the current
uncertainty regarding the timing and terms of Brexit we continue to
monitor developments and will take appropriate further measures
once we have a clearer understanding of the potential opportunities
and challenges.
-- COVID-19 pandemic
The Group is complying with international governmental advice
and requirements across its operations to prioritise safety, with
all employees able to continue working effectively from home with
minimal disruption to the company's day-to-day operations.
Our brands enjoy sales through a tightly managed product range
with a broad distribution base. We have therefore been able to
adapt to the changes in product mix, trade channel shift and
additional uplift in consumer demand for our brands in the retail
sector caused by the pandemic. Whilst supply chains have been
seriously tested during this time, we have, with the support of our
distributors, customers and logistic partners, successfully
maintained the availability of our brands during this year of high
level of demand.
Whilst the ongoing pandemic presents challenges in forecasting
accurate market trends over the next six months, our brands are
relatively well positioned and we will continue to work closely
with our trade partners and customers to ensure we maintain stock
cover and flexibility through this uncertain year. In addition, we
will continue to prepare exciting new marketing programmes, line
extensions and new to world brands to take advantage of the fresh
opportunities that will naturally arise as consumer habits and
trade structures shift.
Future developments
We remain focused on four key growth drivers to maintain
profitable brand growth and create value. These are listed
below:
Brand activation and marketing at the point of sale:
-- Precise timing and frequency of promotional activity including occasions and gifting.
-- Bringing promotions to life and aligned with changing consumer needs.
-- Marketing and promotional activity tailored to local market needs.
Innovation in liquid & packaging development:
-- Pack sizes & formats, new brands, liquids and flavours.
Route to consumer:
-- Build long term relationships with capable local distributors in each key market.
-- Open new territories for each key brand, targeting premium growth markets.
-- Develop new trade channels through format and product.
Access to new production and design:
-- Across all aspects of distilling, bottling and packaging.
Approved by the Board and signed on its behalf by:
S Claydon
Director
26 June 2020
Consolidated statement of comprehensive income
for the year ended 31 March 2020
2020 2019
GBP'000 GBP'000
--------------------------------------------- -------- --------
Revenue 2,441 2,401
Cost of sales (995) (972)
---------------------------------------------- -------- --------
Gross profit 1,446 1,429
Administrative expenses:
Advertising and promotional costs (665) (688)
Other administrative expenses (597) (581)
Total administrative expenses (1,262) (1,269)
---------------------------------------------- -------- --------
Profit from operations 184 160
Finance expense (2) -
Profit before tax 182 160
Taxation 76 -
--------------------------------------------- -------- --------
Profit for the year and total comprehensive
income 258 160
---------------------------------------------- -------- --------
Earnings per share
Basic and diluted (pence per share) 0.05 0.03
---------------------------------------------- -------- --------
Consolidated statement of financial position
as at 31 March 2020
2020 2019
GBP'000 GBP'000
------------------------------- -------- --------
Assets
Non-current assets
Property, plant and equipment 153 129
Intangible assets 1,577 1,556
Deferred tax asset 76 -
------------------------------- -------- --------
Total non-current assets 1,806 1,685
-------------------------------- -------- --------
Current assets
Inventories 349 312
Trade and other receivables 543 207
Cash and cash equivalents 858 1,068
-------------------------------- -------- --------
Total current assets 1,750 1,587
-------------------------------- -------- --------
Total assets 3,556 3,272
-------------------------------- -------- --------
Liabilities
Current liabilities
Trade and other payables 126 98
-------------------------------- -------- --------
Total current liabilities 126 98
-------------------------------- -------- --------
Total liabilities 126 98
-------------------------------- -------- --------
Net assets 3,430 3,174
-------------------------------- -------- --------
Equity
Share capital 1,292 1,292
Share premium 2,908 2,908
Share-based payment reserve 83 83
Accumulated losses (853) (1,109)
-------------------------------- -------- --------
Total equity 3,430 3,174
-------------------------------- -------- --------
Consolidated statement of changes in equity
for the year ended 31 March 2020
Share-based
Share Share payment Accumulated Total
capital premium reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ----------- ----------- -------
Balance at 1 April 2018 1,292 2,908 83 (1,269) 3,014
Profit for the year and
total comprehensive income - - - 160 160
---------------------------- -------- -------- ----------- ----------- -------
Balance at 31 March 2019
and
1 April 2019 1,292 2,908 83 (1,109) 3,174
---------------------------- -------- -------- ----------- ----------- -------
Effect of adoption of
IFRS 16 - - - (2) (2)
Profit for the year and
total comprehensive income - - - 258 258
---------------------------- -------- -------- ----------- ----------- -------
Balance at 31 March 2020 1,292 2,908 83 (853) 3,430
---------------------------- -------- -------- ----------- ----------- -------
Consolidated statement of cash flows
for the year ended 31 March 2020
2020 2019
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Cash flows from operating activities
Profit before taxation 182 160
Adjustments for non-cash/non-operating items:
Finance expense 2 -
Depreciation 13 9
Amortisation of right of use assets (see 49 -
note 17)
246 169
Movements in working capital
Increase in inventories (37) (135)
(Increase)/decrease in trade and other receivables (336) 188
Increase/(decrease) in trade and other payables 28 (137)
Net cash (used in)/generated from operating
activities (99) 85
----------------------------------------------------- -------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (37) (43)
Expenditure relating to licences and trademarks (21) (5)
----------------------------------------------------- -------- --------
Net cash used in investing activities (58) (48)
----------------------------------------------------- -------- --------
Cash flows from financing activities
Interest on lease liabilities (2) -
Repayments of lease liabilities (51) -
---------------------------------------------------- -------- --------
Net cash used in financing activities (53) -
---------------------------------------------------- -------- --------
Net (decrease)/increase in cash and cash
equivalents (210) 37
Cash and cash equivalents at beginning of
year 1,068 1,031
Cash and cash equivalents at end of year 858 1,068
----------------------------------------------------- -------- --------
1 Basis of preparation and summary of significant accounting
policies
The consolidated financial statements are for the year ended 31
March 2020. They have been prepared in accordance with the
requirements of International Financial Reporting Standards (IFRS)
as adopted by the European Union (EU) and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
The financial statements have been prepared under the historical
cost convention.
These consolidated financial statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the parent
company. Unless otherwise stated, all amounts are given in round
GBP'000s.
Distil Plc is the Group's ultimate parent company. The Company
is a public limited company incorporated and domiciled in the
United Kingdom. The address of Distil Plc's registered office is
201 Temple Chambers, 3-7 Temple Avenue, EC4Y 0DT and its principal
place of business is 306.A, 6 Hays Lane, London Bridge, SE1
2HB.
These results are audited; however, the financial information
does not constitute statutory accounts as defined under section 434
of the Companies Act 2006. The consolidated balance sheet at 31
March 2020 and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended have been extracted
from the Group's 2020 statutory consolidated financial statements
upon which the auditor's opinion is unqualified.
The financial information for the year ended 31 March 2019 has
been derived from the Group's statutory consolidated financial
statements for that year, as filed with the Registrar of Companies.
Those consolidated financial statements contained an unqualified
audit report.
Copies of the Annual Report will shortly be available on the
Company's website www.distil.uk.com and from the Company's
registered office.
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 or visit www.rns.com.
END
FR GZGZVMLDGGZM
(END) Dow Jones Newswires
June 29, 2020 07:14 ET (11:14 GMT)
Grafico Azioni Distil (AQSE:DIS.GB)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Distil (AQSE:DIS.GB)
Storico
Da Feb 2024 a Feb 2025
