Distell maintains good growth

Distell has managed to maintain financial growth despite difficult market conditions. company increased its revenue by 12,9% to R4,8 billion over the six months up to 31 December 2007, compared with a revenue rise of 17% and 19,2% during the previous six months and the 2006 financial year respectively. Results were achieved on a sales volume growth of 7,6% to 223,8 million litres, compared with an 11% increase in the preceding six months.
Domestics sales volumes increased 5,4% compared with an increase of almost 12% in 2006. Jan Scannell, Distell’s managing director, attributed smaller growth in domestic sales to higher fuel and food prices and increased debt-servicing cost. But he remained optimistic about this market and predicted continued growth. “The economic fundamentals remain sound and the demand for affordable luxuries should persist. erratic supply of electricity has already had a disruptive impact on business and is impacting on Distell’s ability to meet market demand.”
Major progress was made on international markets outside Aafrica, where revenue rose by almost 21% on a sales volume growth of 17,7%. Spirits volumes were up by almost 12% with good progress made across key markets in Europe, Latin America, Asia and Canada, where wine sales volumes reflected a growth of 18,4%.
Revenue derived from Africa grew by 23,8% on a volume growth of almost 20%. The area beyond Botswana, Lesotho, Namibia and Swaziland recorded revenue of 33,3%. “We are extending our footprint across the continent to capitalise on the rising disposable income that is being fuelled by a robust commodities sector, improved infrastructure and increased tourism,” said Scannell. He projected international trading would remain tough, but foresaw that Distell would maintain its growth in revenue and earnings due to the company’s ability to trade across a wide geographic front with a range of products.
He said Distell’s ability to continually raise the performance of operating units made it possible to boost investments in brands and step up marketing and sales support, while improving the net operating margin from 15,6 to 16,2%. – Glenneis Erasmus