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Distell records ‘stellar’ Africa performance in H1
Despite “tough trading conditions” in its domestic market, South African drinks maker Distell has announced a 7.3% increase in reported revenue for the first six months of the firm’s fiscal year.
Richard Rushton is CEO of Distell Group
Distell’s sales hit R14,4 billion (US$1bn) in the six months to 31 December 2018. The group delivered “solid” growth across all three categories it operates in – spirits, wine and RTDs (ready-to-drink alcoholic beverages) – and recorded gains for 12 out of 15 of its largest brands.
The group’s whisky portfolio, which includes Bunnahabhain single malt Scotch and the Bain’s South African blend, experienced double-digit volume and value gains.
Amarula liqueur was boosted by “select international growth”, while Distell’s brandy stable struggled with cross-category competition and recorded flat sales.
In South Africa, total sales volumes fell by 2.1% due to “declining disposable income which impacted peak-season sales”. However, pricing changes “had a positive impact on revenue”.
Other African markets outside of South Africa delivered “exceptional” comparable revenue growth of 21.1%.
International revenues increased by 3.7% “as momentum built on a narrower and more profitable portfolio”.
“We are pleased with the momentum and continued resilience of our business,” said Richard Rushton, CEO of Distell Group. “Our results reflect the efficiency initiatives aimed at driving consistent market place execution and enhancing margins.
“I’m particularly encouraged with the stellar performance of our Africa operations at a time when we are increasing investments in route-to-market capability and local production.”
Rushton added that Distell is exploring “complementary M&A opportunities” to boost its international business.
“Looking ahead, we expect the current tough domestic environment to persist and economic growth to remain lacklustre,” he said. “We are, however, confident that our consumer-centric approach and diversified portfolio of brands will enable us to capture growth opportunities.”
Distell is currently embarking on a £10.5 million (US$13.97m) upgrade of its Islay distillery Bunnahabhain (see artist’s impression below). The three-year refurbishment programme aims to create a new ‘brand home’ for the distillery, located at the most northerly point of the island.
An aerial view of how Bunnahabhain will look after its £10.5m renovation