Distell continues to post stellar performance as it awaits Heineken take-over

SOUTH AFRICA – South African wine, cider and spirits company, Distell, expects its headline earnings per share to rise by as much as 40% in the year ended 30 June 2022 from previous year’s 769.6 cents to 1 079.4 cents.

Its Earnings per share (EPS) is also set to register a 26.1% jump from 880.6 cents to maximum of 1 110.8 cents.

During the period under review, group revenue increased by 20.8% alongside volume expansion of 17.6% compared to the previous 12 months.

In South Africa, the business delivered an outstanding performance with a strong double-digit increase in revenues and volumes. This was during a period with 47 more trading days compared to the prior period.

Meanwhile, the Africa business, including BLNE (Botswana, Lesotho, Namibia and Eswatini) countries, also performed well with revenue and volumes increasing in the mid-teens.

The international business grew revenues and volumes by high single-digits.

The expected bullish full year performance was set precedence by its half-year performance which saw the owner of Nederburg wines and Amarula register a 15.8% rise in revenue to R17.8 billion from R15.4 billion in 2020 on 12% higher volumes.

Domestic revenues increased by 22.9%, with volumes up by 15.4% while focus markets on the continent, outside the Southern African Customs Union, grew revenue by 5.3%.

This was largely driven by Mozambique, Zambia and Tanzania as a result of our accelerated route-to-market (RTM) investments.

Distell is still preparing exit of the Johannesburg Stock Exchange (JSE) in respect to the proposed takeover by Multinational brewing company Heineken.

Heineken announced its offer to buy the South African company for R38.5 billion (US$2.55 billion) in November 2021, with the proposed scheme of arrangement involving splitting Distell into two entities.

The first unit formed will be Newco, an unlisted public company, to house Distell’s big portfolio of best-selling local brandy and whisky, as well as its cider brands, other ready-to-drink beverages and its big range of wine.

These portfolios will be combined with Namibia Breweries Limited which Heineken is also eyeing, and the Dutch brewer’s 75% shareholding in Heineken South Africa and certain other fully owned export operations in Africa.

Distell shareholders are being offered R165 (US$10.9) in cash per share for their stake in Newco – or they can opt for unlisted shares in Newco, or a combination.

The second entity, Capevin, will house Distell’s imported drinks i.e., Scotch whisky unit and Gordons gin business. The shares in this entity will be unbundled and Heineken is offering Distell shareholders R15 (US$0.99) per Capevin share.

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