Distell eyes global growth as FY results soar

Distell has seen its full-year revenues and profits soar in 2015/16, meaning the South African drinks group is now “well placed to expand into growth markets outside of Southern Africa”.

In the year to 30 June 2016, the Amarula liqueur and Bisquit Cognac producer experienced a 9.6% revenue increase to 21.5 billion rand (US$1.5bn) and operating profit increase of 12.3% to 1.6bn rand (US$109m).

Demonstrating “continued momentum in South Africa and growth in key offshore markets”, Distell delivered “robust results” in its domestic market, where sales grew 12.1%.

“In South Africa, we have improved our marketing and sales capabilities by expanding our national footprint and deepening our market penetration to access 36,000 outlets nationwide and, in the process, have achieved growth across all our market categories,” said Richard Rushton, managing director of The Distell Group.

“Our cider brands continue to flourish whilst our wine portfolio has significantly outperformed the growing domestic market.

“We are also starting to see encouraging early signs of renewed brandy volume growth. Cognac, Scottish and locally-produced whiskies continue to record strong gains

“Although global geo-political and economic risks have increased and competition has intensified, we are well placed to expand into growth markets outside Southern Africa.”

On the African continent, Distell achieved strong growth in Botswana, Lesotho, Namibia and Swaziland, but Angola – the group’s second key market after South Africa – continued to be “severely impacted” by a commodity slump.

As a result, Distell’s total revenue in the rest of Africa beyond South Africa and the BLNS countries, declined by 3.2% with a 14.9% drop in volumes.

Internationally, revenues rose by 13.1%, aided by a weaker rand. In the US, Distell has begun to fully integrate its export portfolio with the Terlato Wine Group after establishing a joint venture with the firm in November last year, forming the Terlato Artisan Spirits division.

“We are poised to take advantage of improvements in the economic conditions of the markets where we trade, armed with a differentiated and versatile portfolio of brands for a diverse range of occasions, over a wide spectrum of price points,” added Rushton.