SOUTH AFRICA – South African wine, cider and spirits company, Distell, has entered its new financial year ending 30 June 2022, with positive results reporting double-digit group revenue growth in the first three months.
The beverage maker recorded volume improvement in the twenties, as compared to the corresponding period in the previous financial year.
In its home market, the maker of Amarula, Savanna and Hunter’s Dry, attained a revenue growth by double digits in the thirties from July to September, despite the 28% loss in trading days, due to Covi-19 related restrictions.
Performance in the rest of the region, excluding BLNE countries (Botswana, Lesotho, Namibia and Eswatini), attained a double-digit revenue decline with single digit volume increases, as compared to the corresponding period.
Given the region’s dependence on exports from South Africa, port IT issues and social unrest in KwaZulu-Natal negatively impacted the supply of key brands to the region during July 2021.
This, combined with prolonged on-consumption channel restrictions due to COVID-19 in Kenya, the region’s largest market, exacerbated the impact on the region’s performance, significantly impacting both revenue and volumes.
Other key markets, such as Mozambique, Zambia and Nigeria, all maintained strong revenue and volume performances.
Continued supply chain challenges and lockdown restrictions in key BLNE markets was less pronounced, with low single-digit revenue declines alongside single-digit volume improvement.
Botswana experienced the most impact due to alcohol bans, with Namibia producing a positive single-digit revenue and volume performance.
A combination of global supply chain constraints, on-consumption restrictions in Taiwan (accounting for a quarter of that business) and an 11% stronger Rand on average, weighed on the Group’s international business performance.
As a result, comparable revenues and volumes were down by the teens. Strong momentum on single malts continues with double-digit revenue growth and sales through digital channels remaining strong.
Heineken takeover talks with Distell prolonged
Meanwhile, Heineken’s talks to acquire Distell Group Holdings have been prolonged as the South African drinks maker’s second-largest investor is asking for a higher price, reports Bloomberg.
The Public Investment Corporation (PIC), Africa’s biggest money manager, is holding out for about R200 a share, said the people, who asked to remain anonymous as the talks are still private.
Talks are ongoing, they said, and no final decision has been made. Heineken’s tabled bid hasn’t been disclosed.
The PIC owns a 30% stake in Distell, according to data compiled by Bloomberg. The largest shareholder is Remgro Ltd., an investment group of billionaire Johann Rupert.
Heineken approached the maker of Klipdrift brandy, Nederburg wine and Savanna cider about the possible purchase of most of the business in May.