Strong revenue and EBITDA performance amidst a tough economic and competitor environment

24 August 2018

Distell Group Holdings Limited (Distell), the South African based global drinks company, today released its full year results for the 12 months ended 30 June 2018, declaring a gross cash dividend of 230,0 cents per share, representing a total dividend of 395,0 cents per share for the year.

The company grew its domestic competitive position in all three categories (RTDs; Spirits and Wine), posting strong revenue growth in 13 out of its 15 top brands including exceptional performances in key African markets.

Commenting on the results, Distell’s Group CEO, Richard Rushton, said:

“Distell has performed well with strong revenue and EBITDA growth in a tough domestic economy and increased competition where we grew our competitive position in all three categories. Our strategy to build a meaningful local African platform is progressing well whilst we navigate risks on the continent. Our return on invested capital has improved from a more focused portfolio and rationalising non-core assets earlier in the year. We are still on a journey to create a more agile and focused business where we are seeing increased productivity and efficiencies as a result.”

Group revenue grew by 10,4% to R24,2 billion on 4,6% higher volumes. Revenue excluding excise duty grew by 7,7%.

EBITDA grew by 20,2%. 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%. Normalised EBITDA, excluding pro forma foreign currency translation movements, increased by 7,4%.

Headline earnings, including discontinued operations, decreased by 5,6% to R1,5 billion and headline earnings per share decreased by 5,7% to 668,2 cents. Excluding the pro forma currency conversion movements, the reversal of the interest and the TDL losses referred to above, headline earnings increased by 5,2%.

Total assets increased by 8,0% to R22,1 billion.

Net cash generated from operating activities increased by 21,6% to R2,3 billion. The Group remains in a strong financial position, which is demonstrated by a debt to debt-plus-equity ratio of 22,5% (2017: 25,2%) and a debt-to-equity ratio of 29,0% (2017: 33,8%) at the end of the reporting period.

The restructuring, simplification and implementation of Distell Group Holdings (DGH) shareholding structure took place in the period where trading commenced on 1st June 2018. This was categorised as a capital reorganisation of an existing group and consequently the financial results of the Group are presented using the values of the previous holding 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. The average daily trading volume (ADTV) in DGH from re-listing to end of the financial period increased from 98 909 (Year-To-Date) to 236 979 representing an approximate 140% improvement in liquidity.

“Looking ahead, we expect the current tough domestic environment to continue into 2019 with more pressure on consumer income and spending. We have, however, built sufficient resilience in our business that is supported by the strengths of our diversified brand portfolio, and we are confident that we will be able to respond decisively to these challenges whilst at the same time, continue to focus on margin improvement initiatives across our business,” said Rushton.