Distil delivered a solid trading performance in FY20, despite uncertainties caused by the impact of external events in the form of Brexit initially and COVID-19 more recently. With its disciplined cost approach, Distil saw a 15% increase in operating profit from a 2% rise in revenue. Range extensions have underpinned the continuing success of its leading RedLeg Spiced Rum brand and Distil has continued to lay the groundwork for the further development and future expansion of its brand portfolio.
FY20 prelims: Distil’s FY20 outturn was in line with the revised guidance issued in February. Revenue and gross profit advanced by 2% and 1% respectively. Combined with a small decline in overall costs, operating profit increased by 15% over the prior year to £184K. Year-end net cash fell back £210K to £858K, primarily due to an increase in receivables in March, driven by the strong increase in retail consumer demand. Net assets rose 8% to £3.43m. The implementation of IFRS 16 with regard to accounting for operating leases accounts for the greater increase in EBITDA, relative to those for operating profit and PBT. A tax credit of £76K helped boost a 60% increase in EPS to 0.051p.
Brand performance: Total volumes were broadly flat across the year. RedLeg Spiced Rum continues to lead the way with a volume increase of 24% and a revenue increase of 26%, aided by contributions from the new Caramelised Pineapple variant and the launch of the ready-to-drink (RTD) RedLeg Spiced Rum and Franklins 1886 Cola product. Distil’s gin and vodka brands registered volume declines, with the traditional dry London gin segment still overcrowded. New markets were opened internationally and Distil has secured the Mardi Gras trademark in Europe and the USA with an eye to future new product development (NPD).
Outlook and forecasts: Distil operates across both the on- and off-trade channels with well-positioned brands at affordable prices and can therefore respond to fluctuations in market demand across these channels. There still remains too much uncertainty around COVID-19 and its economic impact to forecast with a high degree of confidence or accuracy for the year ahead. Distil is therefore not giving market guidance at this stage, but will look to do so as soon as it is more assured on consumers’ freedom of movement and the re-opening of trade channels.