Advertise with fastmoving.co.za
 
 

Asset manager CEO says the government has been milking the company in recent years.
Asset manager CEO says the government has been milking the company in recent years.

Distell share price sinks on lower sales

LIQUOR NEWS

By Nick Hedley - Oct 25th 2018, 08:05

The share price of Distell Group, maker of Klipdrift brandies, Three Ships whiskies and Nederburg wines, fell 4.1% to R104.58 after the company said sales had fallen in the September quarter. 

Distell said revenue in the first quarter of its 2019 financial year was flat because of single-digit volume declines on the previous year.

Opportune Investments CEO Chris Logan said the government had “milked” Distell in recent years.

Excise duties as a percentage of total revenue have lifted from 18.8% in 2001 to 26.4% in 2018, he said. Nevertheless, the government has not helped Distell and other SA producers to gain duty-free access to the rapidly growing Chinese wine market.

Logan said it could make sense for Distell to list elsewhere, possibly in London, so that it could access deeper pools of capital to fund its growth.

Distell, whose ownership structure was overhauled recently, said volume was lower in SA because of the higher cost of living and price increases on products a year ago.

The group said its ready-to-drink products, which include the Esprit range of alcoholic fruit-based drinks, were winning market share from beers, while revenue from spirits remained “stable”.

“We anticipate a stronger second quarter given festive season demand and cyclical customer orders over this period.”

In other African countries, the group registered “excellent volume and revenue growth” in the first quarter, led by its businesses in Kenya, Botswana, Zambia, Mozambique and Zimbabwe. The mainstream spirits unit was “a standout performer”.

“Increased commodity pricing should allow commodity-producing countries to improve meaningfully, while investment-led growth will benefit many of the noncommodity-producing countries.”

The group said it will expand its local production and distribution footprint in the rest of Africa through new investments and joint ventures.

“The group continues to defend and grow its domestic market share, integrate its new African route-to-market acquisitions while creating a more agile and efficient business which aims to enhance margins going forward.”Business Live 

Read more about: share price | industries | distell | alcohol

Related News

Tougher taxation needed to tackle alcohol abuse
02/04/2019 - 10:54
The SA branch of the Southern African Alcohol Policy Alliance (Saapa) urges the government to follow Grieve Chelwa and Corné van Walbeek’s suggestion to review the alcohol tax regime (“SA Ranks Sixth Globally as a Nation of Drinkers”, March 4). Beer is cheaper than a loaf of bread or a litre of milk in SA!

Major food and drink firms aim to improve plastic recycling in Africa
02/04/2019 - 10:02
Diageo, Unilever, The Coca Cola Company and Nestlé have joined forces to improve the collection and recycling of plastics in Africa.

Distell’s premium-wine offshoot aims for the top
15/03/2019 - 14:37
"I’m in the business of wine; I’m not in the wine business," says Kay Nash emphatically. That may seem like splitting hairs, but it’s a subtle distinction that’s helping the CEO of Libertas Vineyards & Estates, the new premium-wine offshoot of drinks giant Distell, to shake up the company’s high-end wine business.

Distell aims to go deeper into Africa
14/03/2019 - 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.

Nederburg maker Distell lifts earnings, even as sales fall
04/03/2019 - 13:08
Distell Group, which makes Nederburg wines and Klipdrift brandies, reported a double-digit increase in earnings for the six months to December, even as sales volumes fell in SA.