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International spirits shine but South Africa drags for Distell Group in fiscal-2020 - results data

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  • Fiscal full-year sales fall 14.6% to ZAR22.37bn (US$1.33bn)
  • Volumes in 12 months to end of June decline 22.5%
  • Spirits sales dip by just 3.5% but wine and cider & RTDs slump over 20%

A resilient year for Distell Group's spirits portfolio has been markedly offset by sales tumbles for the firm's wine and cider & RTD stables, according to 12-month results released today.

The South Africa-based multi-category company has reported a near-15% decline in overall sales from the 12 months to the end of June. In a fiscal-year ravaged by the coronavirus pandemic, Distell saw its domestic sales hit hard by two bans on all alcohol sales earlier this year, resulting in a slide of 18.2%.

Outside of its home market, Distell's African sales dipped by 3%, with the international reporting region declining by 8.8%.

Distell Full-Year Fiscal-2020 - Sales by Region - Reported

Source: Company results

Distell commended the performance of its spirits offerings, particularly in international markets. While the spirits top-line overall fell 3.5%, sales of whisky outside of Africa registered an 8.4% rise, driven by the Bunnahabhain and Deanston Scotch brands.

Wine sales were hit particularly hard by the nation-wide alcohol bans in South Africa, despite bouncing back slightly when the restrictions were lifted. A temporary ban on alcohol exports in March, brought in by the South African government to counter the spread of COVID-19, also hampered Distell's wine operations.

As well as the pandemic, the company's RTD offerings also had to deal with "increased competition and discounting" in South Africa during the 12 months, although cider brand Savanna was credited with maintaining "strong momentum" in the country, thanks, Distell said, to eschewing discounting in favour of "building brand equity".

Distell Full-Year Fiscal-2020 - Sales by Category - Reported

Source: Company results

The company also said today that the Best Global Brands unit in Angola, in which Distell has a 26% holding, took an impairment charge in fiscal-2020 of ZAR143.8m, following on from the previous year's ZAR524m hit. The group blamed the ongoing devaluation of the Kwanza in the country.

CEO Richard Rushton

"The resilience of our business and culture was severely tested during the pandemic and I'm proud of the way we are responding. Rather than cut jobs, we took a painful but necessary decision to reduce salaries, starting with our executives and the Distell directorate. 

"Looking ahead, we anticipate a tough domestic environment with falling disposable income and increasing unemployment our key concerns. We are, however, confident of the way we are managing the business to remain flexible and recession-proof. Our more focused and diversified portfolio of brands along price points, occasions and innovation in response to consumer trends will enable us to position ourselves well for any recovery". 

To access DIstell Group's official fiscal-2020 results announcement, click here.

"The world has changed dramatically" - Click here for just-drinks' interview with CEO Richard Rushton from a year ago


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