| Tue 18 Feb 2003, 16:12 | | DISTELL GROUP LIMITED - DISTELL BOOSTS INTERNATION |
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DISTELL GROUP LIMITED
(Registration number: 1988/005808/06)
Share Code: DST
ISIN: ZAE000028668
DISTELL BOOSTS INTERNATIONAL EARNINGS
Distell Group Limited posted an increase of 52% in trading income of R389,6m
(2001: R255,8m) for the six months to December, 2002, thanks to improved
operational efficiencies, a more focused, better balanced portfolio of brands
and growing international reach. Total sales revenue for the six months rose
16% to R2,9bn.
Distell chairman David Nurek said the most impressive feature of the company`s
performance was the growth in international sales revenue, which had increased
by 31% and now represented 22% of total sales revenue (2001: 18%).
However, the rise in trading income had been negated by the improvement in the
value of the Rand towards the end of the reporting period, reflecting a loss of
R53,2m (2001: R69,6m gain). This included an unrealised loss of R45,6m (2001:
R35,4m gain) from the conversion of foreign operations. Consequently, profit
before exceptional items and taxation, decreased by 0,8%.
Net profit before taxation rose 26% to R291,1m (2002: R231,5m) while
attributable earnings per share were 24% higher at 109,4c (2001: 87,9c). The
board declared an interim dividend of 40c a share, an increase of 14% (2001:
35c).
Distell MD Jan Scannell said Amarula Cream had been a major contributor to the
higher international sales revenue with total sales up 37% for the six months to
December 2002, compared with the same period in 2001. Sales in the US were
showing healthy growth, while in Canada, Amarula volumes increased 83%, with a
recently launched television campaign likely to prompt further growth.
Pointing to the fact that Amarula`s Latin American sales had come under pressure
given difficult trading conditions in the region, Scannell said Distell`s policy
of operating simultaneously in several major markets to counter the risk of
changing trading conditions and currency fluctuations, was proving appropriate.
Revenue from international wine sales rose 39% on volumes 32% higher than for
the comparable period the previous year.
"A balanced portfolio of established and emergent wine brands addressing a range
of markets and consumers is playing a key role in promoting the company`s wine
business, supported by regional office and agency networks. Brands that really
shone were Nederburg, with international sales volumes excluding Africa,
increasing 37% and Two Oceans, 72%. Both had been identified earlier as having
the potential to build a presence abroad."
Scannell said these and other brands were being taken up by major supermarket
chains in the UK, such as Asda (a member of the WalMart group) and Morrisons (a
FTSE-listed company), as well as by multinational chains such as Makro and
Metro. In addition, chains in Germany and the Benelux countries, government-
controlled liquor retailers in Scandinavia and Canada, were also listing the
company`s major brands.
He added that domestically, there had also been volume growth, with spirits
rising 4% and wines by 5,3%. Flavoured alcoholic beverages, however, had
suffered from more aggressive competition from multinationals in the local
market.
The company had increased volumes sold in Africa by 14% and was committed to
strengthening its presence on the continent through investments in Tanzania,
Zimbabwe, Kenya and Mauritius.
Discussing the outlook for the remaining six months, Nurek said the company was
continuing its strategy to drive revenue growth by building brand equity
augmented by improved product service and product supply.
"Although slower growth is foreseen for the next six months, we are expecting
satisfactory growth in trading income for the full year."
DATE FEBRUARY 18, 2003
ISSUED BY DKC (DE KOCK COMMUNICATIONS)
FOR DISTELL GROUP LIMITED
QUERIES JAN SCANNELL, MANAGING DIRECTOR (021) 809 8102
MERWE BOTHA, CHIEF FINANCIAL OFFICER (021) 809 8100
ANDR STEYN, CORPORATE AFFAIRS DIRECTOR
(021) 809 8107 or 082 550 47 58
TESSA DE KOCK/PIPPA PRINGLE, DKC (021) 422 2690
Date: 18/02/2003 02:58:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
