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

Angola and Zimbabwe operations sap Distell earnings
07/08/2019 - 13:07
Beverages company Distell, whose brands include Nederburg wines and Three Ships Whisky, says earnings fell in the year to end-June as it took a hit on operations in Angola and Zimbabwe.

Clover set to return to profit in year to June
13/05/2019 - 10:15
Clover, which makes dairy-based foods and beverages, says it will return to profit in the year ending June 2019 after making its first annual loss in more than a decade in the prior year.

Cape Town micro-brewery takes on light beer market
09/05/2019 - 11:33
For decades, beer connoisseurs the world over have held heated debates over which is better; a lager or a light beer.

Business leaders offer president tips to grow economy post elections
06/05/2019 - 16:22
South African business leaders are in harmony on what the country needs after this week’s elections.

Is it time to introduce a minimum unit price on alcohol?
25/04/2019 - 11:10
In May 2018, Scotland introduced a minimum unit price of 50p per unit (8g) of alcohol, with the aim of reducing abusive drinking. Research had shown that a large proportion of very cheap alcohol consumed in Scotland took the form of heavy drinking, resulting in drunkenness and other socially unacceptable behaviour.