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Tue 5 Jun 2018
Close: 12800c 
Day's move: 0c (+0.00%)
Volume: 0
Trades: 0
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Revenue for the interim period increased by 9.3% to R13.444 billion (2016: R12.297 billion), operating profit climbed 14.6% to R1.832 billion (2016: R1.599 billion), profit for the period attributable to equity holders of the company rose 7.7% to R1.202 billion (2016: R1.116 billion), while headline earnings per share from continuing operations decreased by 4.5% to 510.4 cents per share (2016: 534.4 cents per share).
Dividend
The directors have resolved to declare a gross cash dividend. number 59 of 165 cents per share (2016: 165 cents per share) for the interim period ended 31 December 2017.
Company prospects
Growth across advanced economies and most emerging markets points to a more favourable global economic outlook.
There are still risks facing the domestic economy in the short term. The recent strengthening of the rand, higher grape prices and water shortages will have a negative impact on the business. The Group looks to defend and grow its market share through an optimised brand portfolio and innovation. It will look to continue and lead in the recovery of the brandy category and drive its wine strategy across the price continuum. While competition has increased in the local cider market, Distell will increase investment in renovation of its Hunter's brand, which remains the world's second largest cider brand by volume.
Whilst the drought in the Western Cape poses a real risk to the supply of grapes and wine in the medium term, the company has secured sufficient supply for the current cycle and invested a total of R22,0 million to waste water treatment and reuse programmes to mitigate against further supply risk. The current 29,2% reduction in water usage has been achieved by accelerating the water management programme through demand reduction management and new water-saving initiatives. Certain water-intensive production activities have also been relocated to areas with sufficient water supply.
The Group has largely integrated its new African route-to-market acquisitions as it seeks to build an effective pan-African platform in select markets on the continent. Internationally, the Group looks to sustain the gains made in Europe and build the wine business in key markets.
The Group is making good progress in its two- to three-year programme to create a more agile and efficient business by restructuring its brand portfolio, asset base and operating models. Distell has a portfolio of strong, diverse and appealing brands and the capacity to trade across a spectrum of markets and is well positioned to capture trading opportunities in both domestic and foreign markets.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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