Advertise with fastmoving.co.za
 
 

Distell has Ethiopia, Zimbabwe and Nigeria on their radar screen.
Distell has Ethiopia, Zimbabwe and Nigeria on their radar screen.

Distell aims to go deeper into Africa

LIQUOR NEWS

By Marc Hasenfuss - Mar 14th, 11:10

Distell, the liquor group controlled by investment behemoth Remgro, is looking at more expansion opportunities in Africa after recording high double-digit growth in Kenya, Mozambique and Zambia in the interim period ending December. 

Speaking at an investor presentation on Friday, CEO Richard Rushton said Distell — which owns best-selling brands like Savanna, Hunters, Klipdrift, Nederburg, 4th Street, Cruz, Bernini and Amarula — was constantly reviewing opportunities for investments in new African markets.

“Ethiopia is a big market that, along with Zimbabwe and Nigeria, is on our radar screen.”

In recent years Distell has focused on building up its African presence markedly by capacity expansion and acquisitions.

Rushton would not be drawn on what proportion of revenue and profits Distell hoped to generate in African markets over the longer term. “But East Africa is a central part of our growth plan.”

If markets in Botswana, Lesotho, Namibia and Swaziland were excluded, Distell’s interim volume growth in Africa was more than 16% with revenue increasing 43%.

A category breakdown showed that Distell’s cider and ready-to-drink brands saw a sprightly 15% revenue hike in African markets (excluding Botswana, Lesotho, Namibia and Swaziland).

Spirits sales on the continent soared 38.5% with wine revenues rising about 15%. Rushton emphasised Distell would continue investing in efforts to bulk up its African platforms. Recent initiatives have included securing a newready-to-drink brands partner in Ghana and starting construction of production facilities in Zambia.

The stout African performance contrasted a mixed performance by Distell in international markets where volumes crimped 6.5% and revenue edged up about 4%.

International cider, ready-to-drink brands and wine revenues were down 5.8% and 4.4% respectively with spirits lifting almost 8%. There were, however, some sweet spots in international markets — most notably a double-digit growth in single malt sales and “excellent” growth in whiskey in Taiwan.

Overall, Distell reported a 12% gain at bottom line to 570c/share with the dividend hiked 5.5% to 174c/share. Most impressive, though, was the 35% increase in cash flows to R2.4bn. Avior consumer sector analyst Ross Hindle said the interim numbers were was solid.

“The performance exceeded our expectations.”

Business Live 

Related News

China's thirst for cognac helps Remy Cointreau top profit forecast
07/06/2019 - 10:02
Remy Cointreau handed investors a special dividend payout after reporting a stronger-than-expected 14% rise in annual operating profit, helped by cost cuts and robust demand for its premium cognacs in China.

Abercrombie dives most since 2000 as sales growth starts to wane
03/06/2019 - 09:00
For apparel retailers, the plot has to unfold just right for investors to buy into the narrative. And by the market’s reaction, they clearly did not stick to the script.

South Africa’s economy may be nearing the end of its slump: economist
29/05/2019 - 09:07
After years of slow grow South Africa may be over the worst and could start seeing growth by 2021/22 according to leading economist Mike Schüssler.

SA Agribusiness records $660m trade surplus in the first quarter
28/05/2019 - 09:22
Data from the Agricultural Business Chamber (Agbiz), which represents commercial farmers and agribusiness enterprises showed that the sector weathered the tough start to the year and recorded a trade surplus of $660 million (R9.53 billion) in the first quarter, up 11 percent from the same period last year.

French grocery chain Casino on the ropes after long battle with hedge fund
27/05/2019 - 10:24
The parent company of French grocery chain Casino insisted on Friday that there would be no consequences for some of the country’s best-known supermarket brands after it filed for bankruptcy protection following a long battle with hedge funds.