KWV Limited has reported growth in turnover and earnings, as the South African wine group benefited from a healthy dividend from its compatriot drinks group Distell.

Turnover for the interim six months to 31 December rose by 6.3% to ZAR745.2m (US$92.9m), bolstered by total income from associates, with Distell the biggest by far, of ZAR164m, up 14.2% on the same period in 2006. KWV has an effective 17% share of its rival.

Headline earnings for this period amounted to ZAR106.2m compared to ZAR81.2m for the same period in 2006 - a 31% increase - leading to a 30.6% improvement in headline earnings per share.

However, CEO Thys Loubser has warned that the economic environment in most of the group's major export markets has become tougher and global growth and consumer spending is expected to slow down.

KWV, as with the rest of the industry, is experiencing significant inflationary pressures on production and other costs, which is squeezing margins, though the weakening of the South African Rand will partially alleviate the problem.