4th Jun 2015 07:28
LONDON (Alliance News) - Shares in drinks company Distil PLC were trading lower early Thursday after the company said its revenue dropped substantially in its financial year to the end of March as it shifted its business model, though its pretax loss narrowed as the changes resulted in much lower costs.
Distil said its pretax loss for the year to March 31 was GBP289,000, compared to a GBP392,000 loss a year earlier, but revenue for the group fell to GBP666,000 from GBP2.4 million due to its shift away from third-party distribution deals to a focus on its owned brands, which include Blackwoods Gin and Vodka and RedLeg Spiced Rum.
In December, Distil shares were sold off after it said in its interim results that revenue would drop heavily due to the change in its business model, and said it had faced issues in the half from the protracted approvals process for its drink brands in the US. But the group said in February that it had made progress in the second half, with good sales over the Christmas period, and said its Blavod Black Vodka had gained US approval.
Despite that improvement, the company said the delays in the US approval process and also weaker trading in Eastern Europe, in particular in Ukraine and Russia, had held back its overall performance.
"We have now completed the transition from being a third-party brand distributor to a brand-owning, brand-focused business. Despite delays in the early part of the year we made solid progress in the second half with developments in the USA and continued growth in the UK. New listings for our brands in many leading bars and pubs together with one of the biggest UK multiple retailers have increased consumer awareness and trial of our products," said Executive Chairman Don Goulding.
"I'm delighted to report that this level of improvement in our trading has continued into the new financial year, and we are therefore optimistic looking forward," Goulding added.
Shares in Distil were down 14% in early trade to 0.7923 pence, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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