FY16 marks a year of major progression for Distil with a substantial increase in turnover and a dramatic reduction in the operating loss, despite a marked step up in brand marketing costs and difficult trading conditions in Eastern Europe continuing to adversely impact sales of Blavod, the black vodka brand. Following its TTB approval, shipments of Blavod have been resumed into the USA, after an absence of several years. RedLeg Spiced Rum achieved a significant breakthrough in the UK, winning listings at two of the Big Four supermarket chains in the UK. These gains contributed to a 350% volume increase for RedLeg in its domestic market. The March placing has further bolstered the balance sheet and introduced the highly regarded Miton investment group to the shareholder list.
Prelims results: Turnover and gross profit rose by 76% and 68% respectively, primarily due to the listing gains at two of the Big Four UK supermarket chains. The company invested in a higher level of advertising and promotion to support top line growth, such that contribution growth was 55% to £401K. With other costs coming in around £100K lower than last year, from savings and efficiencies, the reported pre-tax loss fell by 66% (£191K) to £98K. Net cash at the year-end was £982K after the March placing, which raised £626K gross.
Speaking volumes: Total volumes rose 35%, with RedLeg the star with a 350% increase. Blackwoods Gin were up 3%, led by a 62% increase in UK volumes of the Limited Edition product.
TTB approval for RedLeg: Following the US Alcohol and Tobacco Tax and Trade Bureau (TTB) granting full approval to Blackwoods gins and vodka along with Blavod black vodka in the early months of 2015, the long- and eagerly awaited TTB approval for RedLeg was granted last month. This will allow shipments to the USA ahead of the Christmas period, but it will take time and investment to build the brand in the USA.
A year of investment ahead: FY17’s priorities will be increasing distribution for RedLeg and opening new export markets for the brand portfolio – rather than new product development. This will require increased marketing and human resources, as Distil continues to invest in top line growth, with a similar forecast pre-tax loss to FY16.