Tue, 12 Nov 2019

Distell - which owns brands like Hunter's Nederburg, Savanna, Amarula Klipdrift, Richelieu and JC le Roux - reported a single-digit decline in volumes for the quarter to end-September compared to the same period last year. Its revenue for the three months was higher by single digits, the company said in a trading update.

Revenue growth in its ready-to-drink (RTD) segment - which includes its Bernini and Extreme brands - continues to take market share from beer, Distell reported.

Its wines saw flat revenue growth due to higher prices ("increased grape and wine prices [were] passed through to the consumer, due to the drought effects on the 2018 and 2019 harvests").

Revenues from spirits recorded incremental revenue growth as consumers sought "value".

While sales in Namibia and Zimbabwe were impacted by challenging economic conditions, Kenya, Botswana, Zambia and Mozambique continue to grow by double digits.

Overall revenues in markets outside of Africa were lower, but its brands like Bunnahabhain, Scottish Leader, Amarula and Deanston all saw revenue growth in overseas markets.

"Whilst premium wines recorded overall lower comparable revenue due to its business recalibration, key brands showed higher revenue and volume growth in influential markets such the Netherlands, Germany and Nordic countries."

Distell's share price, which is trading at its highest level since last year July, was up half a percent by midday on Wednesday to around R138.70.

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