TIDMDIS
RNS Number : 3044P
Distil PLC
18 October 2021
Distil plc
("Distil" , the "Company" or the " Group ")
Interim Results for the six months ended 30 September 2021
Distil plc (AIM:DIS), owner of premium drinks brands RedLeg
Spiced Rum, Blackwoods Gin and Vodka, TRØVE Botanical Vodka and
Blavod Black Vodka is pleased to announce its unaudited interim
results for the six months ended 30 September 2021.
Operational highlights:
-- RedLeg Tropical Rum launched into the UK market
-- Additional listings secured for the Redleg Spiced Rum range
-- TRØVE Botanical Vodka listed in prestigious premium UK retailer
-- TRØVE Trademark successfully registered in USA
-- New export market opened in Ukraine
Financial* and corporate highlights
-- Turnover decreased by 23% to GBP1.44 million (2020: GBP1.88 million) (2019: GBP824k)
-- Gross profit decreased by 23% to GBP794k (2020: GBP1.03 million) (2019: GBP499k)
-- Volumes (litres) decreased by 21% (increased 49% over volumes in same period in 2019)
-- Investment in brand marketing and promotion decreased by 30%
to GBP398k (2020:GBP565k) (2019:GBP219k)
-- Adjusted** administrative costs increased by 10% to GBP338k (2020: GBP307k) (2019: GBP279k)
-- Adjusted*** operating profit of GBP58k (2020: GBP159k) (2019: GBP1k)
-- Operating loss of (GBP44k) (2020: GBP154k profit)(2019:GBP1k profit)
-- Cash reserves at period end of GBP4.22 million (2020:GBP570k) (2019: GBP836k)
-- Successful equity fund raise of GBP3.20 million (before
expenses) to invest in Ardgowan Distillery Company Limited to
support the development of a new Malt Scotch and provide a 'home'
for Blackwoods G in , with its own distillery, gin school and
visitors' centre
-- Appointment of Michael Keiller as Non-Executive Director
*Due to the unprecedented one-off surge in sales in the prior
period, especially during Q2 (June-September), caused by the impact
of lockdown and associated unusual trading patterns, the above
financial highlights are presented for both the prior period and H1
2019 to enable a proper understanding of key trends.
** Administrative costs adjusted to remove the one-off
transaction costs associated with the Ardgowan investment
*** Operating profit adjusted for one-off transaction costs
associated with Ardgowan investment and share based payment
expense
Don Goulding, Executive Chairman , commenting on these results
said:
"Our brands continue to perform well as the market begins to
recover from the effects of lockdown. Results for the half year are
below those of 2020 due to sales lapping an extraordinary increase
last year when the combination of lockdown, a hot summer and
unusual trading conditions led to a significant surge in sales,
particularly in Q2 (July to September) when revenues advanced by
265% versus the prior year.
Comparing sales for the half year to the same period in 2019
(pre Covid pandemic) we increased revenues by 75%.
Our team has managed well the widespread disruption and cost
pressures associated with extensive labour shortages throughout the
supply chain, production and distribution networks. This is likely
to remain an area of focus for the foreseeable future particularly
during the key Christmas trading period. To date we have
successfully maintained supply to all customers across all
brands.
Following a successful equity fund raise for investment in
Ardgowan Distillery in Scotland, exciting development work has
begun with the Ardgowan whisky maker and other renowned whisky
connoisseurs to create our own distinctive Malt Scotch for launch
planned 2022."
Executive Chairman's Statement
After an uncertain start, the UK On Trade has had a successful
reopening over the summer as consumers returned to venues. As
confidence returns, we have secured new listings across the RedLeg
Spiced Rum range, and expect to continue building on these provided
the UK remains lockdown free. The first half of our financial year
has also seen the business secure a new listing for TRØVE within a
prestigious premium retailer.
Global lockdowns continue to ease and have largely ended in our
key export markets, with the exception of Australia which is still
experiencing restrictions. Throughout the period, we have continued
to expand our international reach and have opened a new export
market in Ukraine. In addition, as confidence in international
travel returns, the Duty Free market is showing encouraging signs
of growth. The TRØVE trademark application in the USA has now been
approved.
Operations
Throughout the period, the main challenge to our business has
been ongoing disruption to the supply chain due to widespread staff
shortages across production and distribution, which in turn has
driven production cost increases. Vigorous work with suppliers
behind the scenes has successfully mitigated disruption and kept
our product in the hands of consumers. We are pleased to have
broadly maintained margins versus the same period last year despite
these challenges.
These issues are likely to continue throughout the current
financial year and will remain a priority.
In addition, we are anticipating further cost of goods and
energy price increases across the business, and endeavouring to
maintain margins in light of this.
Investment in Ardgowan
In August, we announced a GBP3 million strategic investment (in
the form of a convertible loan and with an option to increase to
GBP5 million) in Ardgowan Distillery Company Limited which will see
the development of a new Malt Whisky distillery, planned for
opening in 2023. This move will provide the Company with a
long-term interest in a growing premium category as we develop our
own Malt Scotch, as well as providing a new home for Blackwoods Gin
with its own distillery, Gin school and visitors' centre. This
investment forms part of a total initial investment package of
GBP11.4 million, which will be used by Ardgowan to build the
Ardgowan Distillery and visitors' centre.
To enable the Ardgowan investment, we completed an equity
fundraising in August that raised GBP3.2 million (before expenses)
from existing and new shareholders. Net proceeds from the fund
raise are held in cash reserves at the period end pending drawdown
of the GBP3 million loan by Ardgowan, expected in the next three
months.
The Ardgowan Distillery project is aiming to become the most CO
efficient distillery in the Scot ch Whisky industry . Site
clearance has begun and construction works will start, as planned ,
early in 2022 including conversion of existing buildings to create
Distil's Blackwoods distillery and Gin school.
Results versus same period last year
Results for the half year are below together with those for the
prior comparative period which benefited from an unprecedented
surge in sales, particularly in the second quarter, due to the
combination of lockdown, a hot summer and unusual trading
conditions.
Total revenues fell 23% to GBP1.44 million against challenging
comparatives. Compared to pre-pandemic sales in the same period in
2019 total revenues increased 75%.
The Company achieved an operating profit (after adjusting for
one-off costs of investment in Ardgowan and share based payment
expense) of GBP58k (2020: GBP154k; 2019; GBP1k). Despite an
increase in production costs caused by supply chain disruptions we
successfully maintained our year on year margins at 55% during the
period. In the short term we do not expect margins to return to
pre-Covid levels due to cost increases throughout the supply
chain.
Cash reserves stood at GBP4.22 million at the end of the period.
This includes the proceeds of fundraising completed in August
amounting to GBP3.20 million before expenses.
Outlook
Christmas is our key trading period and all of our efforts will
focus on keeping our customers in stock at all times. We are
working closely with manufacturers and suppliers to maintain
continuity against ongoing uncertainties regarding hauliers'
ability to attract a sufficient number of drivers.
Given ongoing supply chain challenges and uncertain timelines
for the resumption of normal activity levels it is difficult to
forecast with accuracy and certainty for the second half of the
year. Market guidance will be released following our key Christmas
trading period.
If the UK remains lockdown-free throughout this period, social
gatherings at home and enjoyment of the On Trade will help
facilitate a return to normal trading/activity levels. Our brands
across the portfolio are well positioned and supported to enjoy
growth in line with this.
Distil plc - Half Year Results
Consolidated comprehensive interim
income statement
----------- ----------- ------------
Six months Six months
ended 30 ended 30 Year
September September ended 31
2021 2020 March 2021
Un-audited Un-audited Audited
GBP'000 GBP'000 GBP'000
Revenue 1,435 1,878 3,616
Cost of sales (641) (847) (1,606)
----------- ----------- ------------
Gross profit 794 1,031 2,010
Administrative expenses:
Advertising and promotional costs (398) (565) (1,071)
Other administrative expenses (410) (307) (651)
Share based payment expense (30) (5) (34)
Total administrative expenses (838) (877) (1,756)
Operating (loss)/profit (44) 154 254
Finance income - - -
Finance expense (1) - (11)
Loss/profit before tax from continuing
operations (45) 154 243
Income tax 65 64 100
----------- ----------- ------------
Profit for the period 20 218 343
----------- ----------- ------------
Profit per share:
From continuing operations
Basic (pence per share) 0.01 0.04 0.07
Diluted (pence per share) 0.01 0.04 0.07
Consolidated interim statement of financial As at 30 As at 30 As at 31
position September September March 2021
2021 2020
Un-audited Un-audited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 167 151 167
Intangible fixed assets 1,602 1,586 1,598
Financial assets 3,000 - -
Deferred tax assets 241 140 176
----------- ----------- ------------
Total non-current assets 5,010 1,877 1,941
Current assets
Inventories 542 405 553
Trade and other receivables 674 1,157 609
Cash and cash equivalents 4,215 570 1,062
----------- ----------- ------------
Total current assets 5,431 2,132 2,224
----------- ----------- ------------
Total assets 10,441 4,009 4,165
----------- ----------- ------------
LIABILITIES
Current liabilities
Trade and other payables 512 356 358
Financial liabilities 3,000 - -
Total current liabilities 3,512 356 358
Total liabilities 3,512 356 358
----------- ----------- ------------
Net Assets 6, 929 3,653 3,807
----------- ----------- ------------
EQUITY
Equity attributable to equity holders
of the parent
Share capital 1,308 1,292 1,292
Share premium 5,964 2,908 2,908
Share based payment reserve 147 88 117
Accumulated losses (490) (635) (510)
----------- ----------- ------------
Total equity 6,929 3,653 3,807
----------- ----------- ------------
Consolidated interim cash flow statement
----------- ----------- -------------
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
Un-audited Un-audited Audited
Cashflows from operating activities GBP'000 GBP'000 GBP'000
(Loss)/profit before tax (45) 154 243
Adjustments for non-cash/non-operating
items:
Finance expense - - 11
Depreciation 8 7 15
Share based payment expense 30 5 34
(7) 166 303
Movements in working capital
Decrease/(increase) in inventories 11 (56) (204)
Increase in trade receivables (65) (614) (66)
Increase in trade payables 154 230 221
----------- ----------- -----------
Cash generated by/(used in) operations 100 (440) (49)
Net cash generated by/(used in) operating
activities 93 (274) 254
Cashflows from investing activities
Purchase of property plant & equipment (8) (5) (29)
Expenditure relating to the acquisition
and registration of licenses and trademarks (4) (9) (21)
----------- ----------- -----------
Net cash used in investing activities (12) (14) (50)
Cashflows from financing activities
Net proceeds from issue of shares 3,072 - -
Net cash used in financing activities 3,072 - -
Net increase/(decrease) in cash and cash
equivalents 3,153 (288) 204
Cash & cash equivalents at the beginning
of the period 1,062 858 858
Cash & cash equivalents at the end of the
period 4,215 570 1,062
----------- ----------- -----------
Notes to the interims accounts:
1. Basis of preparation
This interim consolidated financial information for the six
months ended 30 September 2021 has been prepared in accordance with
AIM Rule 18, 'Half yearly reports and accounts'. This interim
consolidated financial information is not the Group's statutory
financial statements within the meaning of Section 434 of the
Companies Act 2006 (and information as required by section 435 of
the Companies Act 2006) and should be read in conjunction with the
annual financial statements for the year ended 31 March 2021, which
have been prepared under International Financial Reporting
Standards (IFRS) and have been delivered to the Register of
Companies. The auditors have reported on those accounts; their
report was unqualified, did not include references to any matters
to which drew attention by way of emphasis of matter without
qualifying their report and did not contain any statements under
Section 498 (2) or (3) of the Companies Act 2006.
The interim consolidated financial information for the six
months ended 30 September 2021 is unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period. Comparative numbers for the six months ended
30 September 2020 are also unaudited.
2. Financial Assets/Liabilities
On 20 July 2021, the Company agreed to advance a loan of GBP3
million to Ardgowan Distillery Company Limited to fund the
development of a new whisky distillery, which is due to be drawn
down in January 2022. As a result, a financial liability and
corresponding financial asset have been recognised as at 30
September 2021. The loan is being funded by the placing and
subscription of 160,000,000 shares completed in August 2021, which
raised GBP3.2 million before expenses.
3. Availability
Copies of the interim report will be available from Distil's
registered office at 201 Temple Chambers, 3-7 Temple Avenue, EC4Y
0DT and also on www.distil.uk.com .
4. Approval of interim report
This interim report was approved by the Board on 15 October
2021.
For further information please contact:
Distil plc
Don Goulding Executive Chairman Tel: +44 203 283 4007
Shan Claydon, Finance Director
----------------------
SPARK Advisory Partners Limited
(NOMAD)
----------------------
Neil Baldwin Tel +44 203 368 3550
Mark Brady
----------------------
Turner Pope Investments (TPI)
Limited (Broker)
----------------------
Andy Thacker / James Pope Tel +44 20 3657 0050
----------------------
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