Wrap Text
Voluntary Performance Update
Distell Group Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2016/394974/06)
JSE share code: DGH
ISIN: ZAE000248811
("Distell" or "the Group" or "the Company")
VOLUNTARY PERFORMANCE UPDATE
In light of the unpredictable nature of trading conditions over the past
year, particularly in relation to the banning of alcohol sales in South
Africa as a part of the South African government’s Covid-19 pandemic
(“pandemic”) response since 26 March 2020, the board and management of
Distell wish to update shareholders and the market on the Company’s
business and performance for the nine months ended 31 March 2021 (“current
period”).
Whilst meaningful comparison of the Group’s performance against the prior
corresponding period is nuanced, management has elected to issue this
performance update to provide provisional guidance to shareholders and the
market in advance of the Group’s results for the year ending 30 June 2021,
which will be published on or around 26 August 2021.
Trading environment
South Africa, our largest market by revenue, has seen the Government
imposing restrictions on the trading of alcoholic beverages, reducing the
trading period by 132 trading days (36%) in the current period versus 4
days in the corresponding period (28 – 31 March 2020). Other markets in
African and international countries, which we operate in and export to,
experienced restrictions at different times with the global travel retail
(“GTR”) market closing earlier as a result of travel restrictions, and
African markets being effected later as a result of South African export
closures and their own lockdown restrictions.
Group performance
• Group revenue and volumes are tracking 8,1% and 6,0% respectively
ahead of the corresponding 9 months ended 31 March 2020 (“prior
period”).
• In South Africa, although 132 trading days were lost due to various
bans on the sale of alcohol during the current period, the business
has been able to recover well to mid-single digit revenue and volume
improvement. Category performance continued to be driven by spirits
and ready-to-drink (“RTD’s”) brands, continuing with previous market
share gains.
• In the rest of Africa, excluding BLNE countries (Botswana, Lesotho,
Namibia and Eswatini), the Group continues its impressive performance
with increased revenues and volumes up by double-digits compared to
the prior period, driven by Kenya, Mozambique and Nigeria as a result
of continued route-to-market (“RTM”) investments.
• The Africa business, including BLNE countries, continues its
performance reported at the interim period with revenue and volume
growth in the teens.
• The international business performed well and continues its momentum
of revenue growth in the teens, driven by strong growth in single
malts and a resilient Amarula performance in key markets. Since the
opening of exports from South Africa following the initial alcohol
drinks export ban, wine sales have normalised in a competitive
market. Strong online spirit sales continues.
The Group’s net debt position at 31 March 2021 was R2,8 billion, compared
to R2,7 billion at 31 December 2020. The Group was therefore well within
its debt covenants relating to its South African medium-term debt. The
sale of Plaisir de Merle became effective on 1 April 2021 and most of the
cash proceeds for the sale were received subsequently.
Whilst overall performance and cash generation are ahead of expectations,
the Group remains cautious for the remaining three months’ of trading for
its full financial year, given the uncertainty of future alcohol bans in
South Africa.
This uncertainty created by unpredictable bans on the sale of alcohol
inhibits the Group’s ability to give accurate profit guidance for the
remainder of the year with a reasonable degree of certainty. A further
announcement will be made once there is greater certainty regarding the
anticipated range in earnings per share and headline earnings per share
performance for the year ending 30 June 2021.
Alongside a resilient South African business, the Group’s businesses in
both African and international markets are performing well by capitalising
on previous investments and focused execution of its strategy.
The Group’s diverse portfolio of brands, superior customer execution,
production efficiencies resulting from past investments and sufficient
liquidity headroom to navigate any short-term challenges in the current
environment has provided an effective platform from which to generate a
strong cash flow position.
We remain committed to protecting the lives of our employees, livelihoods
within our industry and to serving our customers efficiently while
creating shareholder value over the long-term.
The above information has not been reviewed and reported on by the
Group´s external auditors.
Stellenbosch
20 April 2021
Sponsor and Corporate Broker
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 20-04-2021 01:30:00
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