East Imperial issues bullish year-end trading update
East Imperial, the fast-growing New Zealand producer of ultra-premium mixers, yesterday issued a bullish pre-close trading update for the year to 31 December 2022.
Revenues rose by 15.5% year on year to approximately £3.2m, in line with expectations. Key to the growth were increased sales across all markets plus improving margins as costs pressures were reduced.
East Imperial’s business model differs from that of other mixer producers in that it focusses largely on the on-trade where margins are the most attractive.
Chief executive Tony Burt said he was “particularly pleased by record sales in our home market of New Zealand over the Christmas period.”
In the key US market, case sales were up 68% (+71% in Southern California) as the distribution agreement with Republic National Distributing Company began to bear fruit, bringing East Imperial products to new customers and responding to strong demand from the existing base.
Further strong growth in the US plus improved margins are expected this year as the recently signed deal with Lion Brewery as a bottling partner will create significant cost savings as East Imperial expands in the fast-growing US market.
Sales in year in the Asia Pacific region were depressed by continuing Covid restrictions, especially in the first half of the year, but were in line with expectations.
The saw a “strong return to growth” in the second half and believes it is well placed to continue to capitalise on demand from premium customers as China’s reopening continues apace. This will be boosted by the distribution agreement with Wen Hua Hang Wine Spirits Company signed in August.
The recent Vietnam distribution agreement underlines the strategy of building a deep regional network across South East Asia and “represents another important milestone for the Group with a region that is a leading destination for tourists”, the company said.
While market conditions will continue to have an impact on margins, the pressure eased in the last quarter of 2022 due to a softening of freight charges and this margin improvement has continued into 2023, the statement said.
The group says it “remains laser-focused on margin improvement” opportunities in the medium term, with bold initiatives underway to significantly reduce manufacturing costs.
Fully audited results for the year will be published in April but Burt exuded confidence in a statement yesterday.
“The double-digit revenue growth we experienced over the year is testament to excellent customer demand for our product in key markets as well as the strong operational foundations we have put in
place,” he said.
“2022 was a transformational year for our US business, with the expansion of our distribution network and the appointment of a bottling partner, and I am very excited about the potential for growth in the coming years.
“We are a brand with a deep Asia-Pacific heritage and as borders opened in this region, demand for
our ultra-premium product has soared.
“This positive momentum is continuing into 2023 as we continue to benefit from the ongoing shift towards premiumisation across the beverage industry and we remain confident in our strategy of aiming to be the only ultra-premium choice for mixers in our markets.
“After three years of Covid restrictions we feel that the shackles have been fully lifted and the path is
now clear for us to resume an even greater growth trajectory.”