Distell earnings jump on festive season trading

Cape Town – Distell Group [JSE:DST] has grown its headline earnings by 17.8% to R1.2bn thanks to strong domestic festive season trading.

Headline earnings per share were 17.7% higher at 531.5 cents as year-on-year revenue grew 11.2% to R12.2bn for six months to December 31 2015.

Distell Group MD Richard Rushton said consumers responded positively to the company’s product offerings and promotions over the festive season.

“Our performance also reflects the continued progress we are making in South Africa where we are strengthening our market position with significant improvements in market penetration and customer service," he said.

Distell's South Africa operations raised revenue by 14.6%, and volumes by 13.3% for the period, largely due to Distell's enhanced market penetration as well as improvements in its product mix and customer service.

Distell’s other markets in sub-Sahara delivered mixed results. Revenue grew 1.2% on a sales volume decline of 7.4%.

Angola, the company’s biggest market in the region outside South Africa, proved more challenging, owing to the prevailing adverse macroeconomic conditions in that country which were further compounded by hikes in excise and import duties.

Nigeria was able to deliver solid growth despite a slump in oil prices. Rushton emphasised the potential for further improvements in performance as a result of a strengthened route-to-market.

“Our performance in Southern Africa was gratifying despite challenging conditions in West Africa.  Our focus markets, Namibia, Botswana, Zambia and Mozambique all posted strong growth,” he said.

Distell has declared an interim cash dividend of 165 cents.

Distell shares were up 4.61% to R161.60 just before Wednesday’s close on the JSE.