The reporting of further loss reduction at the interim stage has been somewhat overshadowed by the more positive news of a listing for its RedLeg spiced rum at a second UK supermarket chain. Distil has delivered a substantial improvement in its interim performance, with a 55% reduction in its pre-tax loss to just £90K. This has been driven by strong top line growth (+89%), especially for its RedLeg brand, driven by distribution gains supported by increased advertising and promotion in what remains a competitive market. In turn, good cost control has seen a 16% reduction in administrative costs.
Another major listing win: Further to the April announcement of a listing win at a major UK supermarket chain, Distil has announced that its RedLeg brand has won a listing at another leading supermarket operator. This should further underpin RedLeg’s future growth prospects and highlights the brand’s potential long-term value.
Interim results: Distil has enjoyed a good first half, with turnover almost doubling and the pre-tax loss more than halving in the period. Turnover rose 89% to £530K, driven by increased listings for its RedLeg brand and further progress with the Blackwoods brand. The company has supported this with increased advertising and promotional spend, which will continue through the peak Christmas trading period. The operating loss fell by 54% to £89K
Other developments: These results have been delivered despite declining volumes of Blavod sales in Eastern Europe due to adverse currency moves. While Blackwoods Limited Edition gin obtained its full TTB (US Alcohol and Tobacco Tax and Trade Bureau) approval, there has been a delay to RedLeg’s approval due to a technical query. This should not however affect RedLeg’s availability for its planned US launch next year.
Forecasts: We are leaving our forecasts unchanged at this stage, despite the new listing win and the interim increases in both turnover and promotional support being above those forecast for FY16. This will enable us to review the progress made with account wins and greater distribution penetration on sales and profit performance over a