Distil PLC on Thursday said turnover and gross profit increased in its latest half year, and that results remain ‘encouraging’ despite macroeconomic headwinds driving up costs.
Despite these improvements, shares in Distil were down 11% at 0.40 pence in London on Thursday afternoon.
The London-based premium drinks manufacturer reported a pretax loss of £314,00 for the six months ended September 30, compared with a £555,000 loss the prior year.
Distil, whose brands include RedLeg Spiced Rum and Blackwoods Gin & Vodka, said revenue increased 37% to £632,000 from £210,000. Gross profit increased 35% to £283,000 from £210,000.
Executive Chair Don Goulding said he was ‘pleased to report that the business has returned to growth’.
This followed disappointing results for the year ended March 31, when revenue fell 55% to £1.3 million from £2.9 million, and gross profit plummeted to £684,000 from £1.6 million.
Distil added that administrative costs increased 12% to £489,000 while cost of sales increased 40% to £349,000. The company also reduced investment in brand marketing and promotion by 58% to £159,000.
Distil noted the ‘business remodel’ undergone in the first half of 2022; Goulding said the first half of financial 2023 ‘has enabled us to embrace the autonomy that [this] was designed to afford’.
Additionally, Goulding commented: ‘H1 has not been without its challenges, as the business continues to face wide-spread cost of goods increases in response to inflation and the war in Ukraine, as well as a UK duty increase on all alcoholic beverages.
‘Reflecting the economic climate, consumers globally remain cautious, the impact of which is being felt in the trade and is expected to continue in the short to medium term.’
However, he said Distil was ‘confident we will continue to build on promising wins within both the UK on-trade and export markets for the remainder of the year, demonstrating that we are successfully rebuilding from a stronger position.
‘We head into our biggest trading period having implemented price premiumisation across the portfolio and as a result of this, coupled with the work of the operations team to reduce cost of goods, we anticipate that we will begin to recover margins.’
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