• Half-year net losses from continuing operations fall to GBP393,000 (US$614,000), from GBP12,000 last year
  • Operating losses hit GBP344,000, from profits of GBP46,000
  • Net sales down by 33% to GBP2.66m
  • Group seeks investment to meet "medium-term" cash needs
Blavod Wines & Spirits facing  tough times

Blavod Wines & Spirits facing tough times

Blavod Wines & Spirits is hopeful that a new distribution deal and talks to gain outside investment will buy time to transform its fortunes, after seeing half-year losses deepen.

Blavod's net losses from continuing operations sank to GBP393,000 (US$614,000) for the six months to the end of September, it said today (6 December). Losses were GBP12,000 in the same period of last year.

The loss of the licence to Cockspur rum in the UK continued to weigh on the company, as did the loss of a key grocery account and tough economic conditions in general. Blavod swung to operating losses of GBP344,000, versus profits of GBP46,000 a year earlier. Net sales fell by a third, to GBP2.66m.

While Blavod's management said that it "does not see a profit improvement" for the full-year, and consumer spending remains constrained in its key UK market, the firm said it is taking action to turn results around. It said that it is "in active discussion with current and prospective investors" in order to secure funding to meet "medium-term cash requirements".

Separately, the group announced today that it has signed a production, manufacturing and distribution deal with Germany-based Waldemar Behn GmbH & Co. Waldermar Behn will produce and distribute Blavod Black vodka for most markets in mainlain Europe, including Eastern Europe, Blavod said. 

"This is aimed at accelerating growth in new and existing European export markets," said the group, "providing sales reach where we have no coverage currently, increasing our marketing investment in brand building through associated production and logistic savings."

In addition, Blavod said that it will transfer some of its smaller agency brands to a "close partner company" in January 2012. It did not name the brands. "These brands are in relatively early incubator stages of development and therefore have no material impact on our sales or profits," it said.