Distell shows strong growth for year

The South African wine and spirits group Distell has reported strong growth for the year to June 2012, with revenue up 15% over the previous year.

Across the group’s portfolio of wines, spirits and RTDs, Distell achieved a 9.9% increase in sales volumes, with total revenue growing to 14.2 billion South African rand.

Distell Group managing director, Jan Scannell, said: “What is most pleasing is that international volume growth was achieved across all important categories, with spirits and wine sales volumes growing by 13% and 6% respectively, while RTD volumes rose by 19%.”

The growth in spirits came from cream liqueur Amarula, Cognac brand Bisquit, and the Three Ships whisky range, all of which achieved double digit growth. However, weaker performance came from the brandy category.

Ciders and RTDs also achieved double digit growth.

Scannell confirmed that the company was on track to increase the year-on-year contribution of export sales to revenue. Non-duty paid revenue outside South Africa, accounted for 27.5% of total revenue.

Although the group’s wine sales growth in South Africa was slightly below the national average, Scannell said that contrary to the view of some wine producers, the UK could still offer good growth for Distell. “Our investment in 2010 in Brand Phoenix is yielding good results. We are now far better represented in the retail channel than ever before and continue to unlock the potential in this market.”

Sub-Saharan Africa showed strong growth, providing 60.8% of the group’s total foreign revenue.

Earnings were also affected by the South African government’s reclassification of the duty on wine aperitifs (flavoured, fortified wine-based drinks), which are now charged in the same way as spirits. This created a one-off duty provision of 297.8 million South African rand.