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Distil H1 sales plunge 38%
The UK-based owner of Blackwoods Gin, Distil, saw revenue plummet by 38% in the six months to 30 September 2024 as inflation hits consumers’ drinking habits.
For the six months ending 30 September 2024, Distil reported revenue of £393,000 (US$506,408), down from £632,000 (US$814,376) in the same period last year.
Second-quarter (Q2) revenue (July to September 2024) fell by 8% year on year.
Gross profit plunged by 44% from £283,000 (US$364,366) to £158,000 (US$203,427) for the six-month period.
In a statement, Distil chairman Dan Goulding said: “The first six months of the financial year have been challenging for the business as we have felt the impact of wider industry and macroeconomic conditions as consumers have less disposable income for socialising both in and out-of-home.
He noted that the first quarter of the year (April to June 2024) was “particularly difficult” due to the amount of stock leftover after the “slower than expected” festive period in 2023.
He continued: “This impacted trade sales into key customers and distributors. Shifting consumer habits in response to inflation meant that stock levels had not been depleted at the usual rate, reducing the level of orders throughout Q4 of the prior financial period and Q1 of the current financial year.
“This was combined with general category trends downwards to create poor numbers of sales out, although the impact at a consumer level was not as severe.”
Goulding highlighted that Q2 revenue was up by 88% when compared with Q1. During Q2, the company said it had made efforts to control production costs, and has also seen a drop in freight prices.
Goulding explained: “We continue to explore opportunities for alternative purchasing sources and have successfully negotiated more favourable terms with key suppliers, helping to mitigate the impact of these challenges on our cost base.”
The company will continue to “closely monitor market conditions to adjust pricing strategies as needed”.
During the first half of its financial year, Distil began the first distillation of Blackwoods Gin at its new brand home, located on the same site as the Ardgowan Distillery in Scotland.
A portion of the money from Distil’s recent £650,000 (US$870,000) fundraise in September will be used to finish building the Blackwoods Gin site to enable it to open to the public “as soon as possible”.
Furthermore, the newly constructed Ardgowan Distillery is aiming to start whisky production and open the site next spring, with its stills recently arriving on site. Distil has invested millions of pounds into building Ardgowan.
Outlook
The chairman said the focus for the rest of the year will be on “increased promotion support” during the Christmas period.
Goulding added: “After a slow start to the year, we are encouraged by the uplift in Q2, particularly as we head into our busiest sales period. We’ve been working with our distribution partners to ensure we have a strong programme of promotional activity through to the new year, to generate further sales uplifts.”
For the second half of its financial year, Distil is planning to launch a limited edition line extension for its RedLeg rum brand, and hopes to open its new Blackwoods Gin space.
Gould said these moves would “amplify” the company’s recent listings in the on-trade and retail, and drive growth until the end of the year.
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