Distil Q4 revenue falls by 37%
Blackwoods Gin owner Distil saw revenue decrease by 37% in its fourth quarter, however it was the firm’s strongest performance of the year.
In a trading update, RedLeg Spiced Rum owner Distil revealed its unaudited results for the year ending 31 March 2023.
For the fourth quarter (Q4), volumes decreased by 40%, and investment into advertising and promotions plunged by 66%.
It followed a tough third quarter for the company, when revenues in the three months to December 2022 plummeted by 48% to £411,000 (US$514,000).
Dan Goulding, executive chairman of London-based Distil, said the unaudited full-year revenue for 2022/2023 “sits slightly below market expectations” at £1.32 million (US$1.65m), down from £2.94m (US$3.67m) the previous year.
Unaudited full-year loss before tax was £71,000 (US$88,823), down from £95,000 (US$118,847) year on year.
Goulding said: “Quarterly performance was suppressed due to reduced promotional activity in UK major grocery as a result of the transition away from distributor management.
“The quarter also saw us lapping particularly strong export sales last year, as we opened significant new markets and saw the benefit of associated pipe-fill sales.”
The company noted that the year has been challenging due to the business remodel, with the company taking control of major retailers internally and moving its UK on-trade business to Marussia Beverages in October.
The move followed the decision to withdraw its portfolio of spirits from long-term UK distributor, Hi-Spirits.
“We remain confident that the decision will yield significant revenue upside from the next financial year onwards,” Goulding noted.
Positive outlook
Goulding noted a “positive” outlook for the next financial year.
He continued: “Q4 delivered the strongest revenues of the financial year, indicating that we are successfully rebuilding following the business remodel in the first half of the year.
“It has been a transitional year for the business – there was a bigger job to be done than anticipated due to larger volumes of stock available in the trade than reported, however we are now through the issues that this has caused in previous quarters, and trading well with direct customers.
“We are confident that we will continue to build on this success and begin to see the benefits of the remodel from Q1 FY23/24.”
Distil has also opened new markets in Europe, and will focus on “expanding and strengthening” the global brand footprint in the year ahead, Goulding said.
Furthermore, the company has been hit with double-digit price increases from suppliers, as a result of inflation, Goulding added.
“The team is working hard to mitigate these increases and reduce our costs moving forward,” he said.
Ardgowan update
The company has also invested millions of pounds in the Ardgowan Distillery in Scotland, which will include the build of a Blackwoods Gin facility for Distil. The firm said internal renovation works to the gin building have been completed and a still is due to be installed in May.
Ardgowan will manufacture select Distil brands including Blackwoods Gin and Vodka, and Trøve Botanical Spirit.
Distil is also planning to release a blended malt whisky with Ardgowan for the second half of the year. This is part of the company’s plans to create “new-to-world products in response to consumer trends”.
Goulding said the company has a “good cash position” for its next financial year, with reserves of £515,000 (US$644,280).
Distil will provide market guidance for 2023/2024 during its announcement of the audited full-year results in June.
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