Distell reports volume increase of 5.7%

Bisquit cognacs delivered substantial growth, according to Rushton, with South Africa now an important market for the brand. Its volume increases were ahead of the double-digit growth of the cognac segment in South Africa.

Notwithstanding the commodity slump and economic and geopolitical volatility, sub-Saharan markets excluding South Africa produced revenue growth of 11.6%, with volumes up by 6.6%. The region contributed 51.4% to Distell's foreign revenue. Increases had come from Angola, Mozambique, Zambia and also Kenya, where Distell recently concluded the purchase of a 26% stake in KWA Holdings East Africa Limited (KHEAL), a major producer and distributor in the country.

The group had been hit negatively by the tough trading conditions across the broader international front, with revenue in other international markets growing by just 3.8% despite the benefit of the weaker rand, as volumes declined by 5.5%. Depressed conditions in the Eurozone, geopolitical instability in the Commonwealth of Independent States (Russia), as well as in Asia had outweighed the gains achieved by some of the wine and scotch whisky brands, as well as Amarula.

Rushton said among Distell's investments during the year had been the strengthening of its structures and capabilities to better serve its selected African, European, North American and Asian markets. "The impact of these investments will need time to take effect but it is essential that we are primed to capitalise on the longer-term opportunities in these markets."

He said challenging trading conditions were expected to continue in many of Distell's key markets. “The risks to top line growth momentum are higher in some markets. However, given our on-going geographic diversification, the progress we have made in optimising our attractive portfolio of strong, differentiated and price- and occasion-diverse brands and our improving routes to market, we are confident in being able to deliver continued growth to our stakeholders,” said Rushton.