UK-based spirits brand owner Distil has confirmed plans to undertake a strategic review “to stabilise the business and drive long-term shareholder value”.
The company, which holds RedLeg spiced rum, Blackwoods gin and Blavod vodka in its portfolio, announced the review after disclosing a forecast 31% slide in sales – on an expected 32% volumes decline – for the fiscal year to the end of March. Distil highlighted a “challenging Christmas period across the UK trade” as well as duty increases and on-premise headwinds as having prompted the move.
“We are currently exploring all aspects of cost management to ensure we manage both external inflationary pressures and reduce discretionary expenditure wherever possible,” the group said in a London Stock Exchange filing yesterday (13 March).
“As part of this review the team is working diligently to recalibrate the cost base in order to balance future growth with the ongoing cash needs of the business.”
Among the areas under consideration are “exit options for non-core brands” and the “potential sale of unused intellectual property” while also investigating “near-term funding”. At the same time, Distil said it is “not actively considering an offer for the company”.
“In order to stabilise the business and deliver shareholder value, we are taking aggressive cost cutting measures, as well as undertaking a review of strategic options,” said chair Don Goulding. “We are committed to finding the best solution for the business and to open and ongoing communication with our shareholders.”
Distil expects to return to growth in the next three years, thanks in part to its UK & Ireland distribution arrangement with Global Brands, which was expanded to cover all the markets’ sales channels last month.
Earlier this week, Global Brands rolled out its lemon-flavoured RTD brand Hooch in draught format.
