S AFRICA: Distell FY boosted by Sub-Sahara Africa, weak rand
- FY net profits jump 40% to ZAR1.52bn
- Net sales in 12 months to June rise 12.8% to ZAR17.74bn
- Operating profits up 22.9% to ZAR2.17bn
- Volumes rise 3.1% to 619.6m litres
Distell has seen impressive full-year sales and profits growth
Strong sales in its export markets and a weak South African rand has helped Distell deliver a double-digit rise in full-year revenue.
The wine, spirits, cider and RTD producer saw sales in the 12 months to the end of June rise by 12.8% to ZAR17.74bn (US$16.6bn). The performance represented a slight slowdown on half-year sales growth.
Net profits in the 12-month period jumped by 40% to ZAR1.52bn, helped by the inclusion of Scotch whisky producer Burn Stewart Distillers in the figures, which Distell acquired last year. Normalised headline earnings were up by 1.7% to 1.37bn.
The group said its domestic sales climbed by 5.2% and volumes by 2.6% despite a “challenging consumer environment” that continues to hamper demand. Spirits volumes declined year-on-year, while its wine portfolio saw “modest” volume growth.
In its international markets, sales rose by 34.2%, while volumes were up 4.5%. The performance was boosted by a “weaker” rand and the inclusion of Burn Stewart's porfolio.
Sub-Saharan Africa, outside of South Africa, saw a “strong” performance with “volumes growth across all categories”, the company said.
Richard Rushton, Distell's MD, said: "Efficiencies gained in procurement, production, distribution and support services, coupled with the foreign currency gains and a more balanced sales mix, helped to offset the impact of steep increases in excise duties and the greater investment in marketing and sales resources."
Looking ahead, Rushton said the company expects a "modest improvement" in trading conditions led by a recovery in developed economies.
Last month, the group said it has struck a deal to acquire a 26% stake in Kenyan spirits firm KWA Holding East Africa Limited (KHEAL) for KES860m (US$9.8m).
Distell has announced the appointment of Lucas Verwey to the role of finance director. ...
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