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Distell posts strong growth and looks to double the size of the business by 2020

Published:  17 February, 2016

The Distell Group posted strong year-on-year growth following a record festive trading period and strong performances across Africa.

The Distell Group posted strong year-on-year growth following a record festive trading period and strong performances across Africa.  

The company has been investing in efforts to double the size of its business by 2020 and produces wines, spirits, ciders and ready-to-drink beverages (RTDs).

"Consumers responded positively to our product offerings and promotions especially 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," said Distell's managing director Richard Rushton.

Richard RushtonRichard RushtonRichard Rushton

The company saw revenue grow 11.2%, a 7.7% growth in sales volume and operating profits rose by 16.5% (ending 31 December, 2015).

Growth was dampened by weakening demand from Angola, the UK, Russia, China and Latin America, according to Rushton. "The challenging global macroeconomic environment is leading to constrained conditions and subdued consumer spending," said Rushton.

Richard Rushton

Revenue for the wine portfolio declined by 7.0%, due to 14.8% lower volumes because of lost summer promotional slots in some European markets following Distell's limited trade recall in May last year.

Despite the challenging conditions, the strong growth achieved in Africa and a favourable exchange rate has helped off set the slump in other markets.  Africa, which contributes 55.2% to foreign revenue, continues to be market that Distell is focused on.

"Our participation in Africa is part of our long-term goal to increase our competitiveness in delivering sustainable revenue and profit growth.  We are focussed on developing the right mix of brands, human capital and capacity to achieve this goal."

The US will also be a key market for the future of Distell and a recent distribution partnership with Terlato Wine Group is helping to pave the way.

"Our partnership with Terlato will set us up for long-term growth in the USA," said Rushton.

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