Distil has announced a share placing, which sees blue-chip fund manager, Miton, take a 10% stake in the company through its UK Microcap Trust fund. This represents a great vote of confidence in Distil and its future prospects, and was reflected in the fact that the placing was made at a premium to the pre-placing price. The proceeds will be used on brand marketing and balance sheet support as volumes grow. This will underpin the medium- and longer-term growth of, and therefore the value of, the group’s brands. Distil also expressed its confidence on Q4 trading and its view that full-year results will be in line with Board expectations.
Placing details: Distil has raised £626K gross funds through the placing of 62.6m new ordinary shares. These were placed at 1.0p, an 18% premium to the pre-placing price of 0.85p, rather than the traditional discount attributed to share placings. As such, this represents a substantial vote of confidence in the prospects of Distil’s brand developments in the global spirits market, especially as the placing sees the arrival of a blue-chip institutional fund, Miton, on the shareholder register with a 10% stake in the enlarged share capital. The enlarged share capital now comprises 499.3m shares. The placing increased the share capital base by 14.3%, with the placing shares accounting for just over 12.5% of the enlarged share capital
New institutional shareholder: Launched early last year, Miton UK Microcap Trust’s investment objective is long-term capital growth. The trust is run by the experienced and well-respected fund managers, Gervais Williams and Martin Turner. Both have a strong reputation and track record within the UK Small Cap sector, seeking out under-valued companies with strong long-term capital growth prospects.
Forecasts and balance sheet: The funds raised are for brand marketing to drive volume and top line growth in both domestic and international markets, as well as providing balance sheet support. We have adjusted share count, cash flow and balance sheet to reflect this news, but leave our operational P&L forecasts unchanged at this stage until the FY16 prelims announcement, which should provide further insight into future brand development and brand investment plans.