SOUTH AFRICA – South Africa based multinational brewing and beverage company, Distell Group has managed strong EBITDA performance and revenue which rose 10.4% to US$1.69bn on 4.6% higher volumes despite a tough economic and competitor environment.
EBITDA grew by 20.2% while normalised EBITDA, which excludes the impact of the impairments, the profit on sale of investments, the one-off losses in TDL, retrenchment and group restructuring costs, increased by 6,0%.
The global drinks company said it grew its domestic competitive position in all three categories that is, in RTDs (ready-to-drink); Spirits and Wine, posting strong revenue growth in 13 out of its 15 top brands including exceptional performances in key African markets.
In the 12-months ended 30 June 2018, net cash generated from operating activities increased by 21.6% to US$161.36mn.
The company noted it remains in a strong financial position, which is demonstrated by a debt to debt-plus-equity ratio of 22.5% and a debt-to-equity ratio of 29.0% at the end of the reporting period.
However, headline earnings including discontinued operations, decreased by 5.6% to US$105.32mn and headline earnings per share decreased by 5.7% to 668.2 cents.
South African sales grew 10.1% in sales and 4.4% by volume amidst increased costs of living placing pressure on consumer disposable incomes.
The spirits category recorded continued growth, whisky portfolio including Three Ships and Scottish Leader recovered in the second half while brandies (Klipdrift and Richelieu) were resilient in volumes.
“Exceptional gin volume growth continues, at 29.3%, alongside growth of 43.6% from vodka following the acquisition of the premium Cruz vodka brand during the previous financial year,” said the company.
“The wine portfolio showed revenue growth of 7.4% due to premium wine still benefiting from trading-up by consumers from mainstream brands, which also recovered in the second half of the financial year.”
Benefits from restructuring
During the period, Distell completed the restructuring, simplification and implementation of Distell Group Holdings (DGH) shareholding structure with the reorganisation becoming effective on 1 June 2018.
According to the company, the collapsed structure increased free-float from 19.5% to 37.5% of its shares in order to provide a simpler, single-entry point into Distell as an investment which aims to increase share liquidity and broader index inclusion over time.
Plans for a major restructuring of its multi-tiered ownership structure were approved by Distell shareholders in October 2017.
This was a capital reorganisation of the existing group geared at improving its investment appeal to both foreign and local investors.
The reorganisation was in line with Distell’s merger with Capevin which previously held a 29% stake in the brewer.
Distell moved to relist on Johannesburg Stock Exchange after suspension of a major shareholder Capevin from the bourse on May 30 to form a merged company.
Remgro, a Stellenbosch investment group is the controlling shareholder in the newly listed Distell Group Holding Limited with 31.4% stake while Public Investment Corporation (PIC) ranks as a major shareholder with 31%.
Looking forward, the company said it will continue to focus on margin improvement initiatives across its business.
The spirits producer said it plans to release six limited edition single malt whiskies next month – two from Bunnahabhain and Ledaig, and one from Deanston and Tobermory.