African Distillers reported an 11 percent growth in revenue above set budget for the four months to October 30, 2019 as current demand for the company’s products remained firm despite the adverse economic environment.
The revenue grew an impressive 49 percent on prior year. Volumes for the company during the period were 13 percent above budget while growing by 47 percent on prior year.
“Current demand remains firm despite the adverse economic environment. Business performance for the first four months of F19 has been pleasing with significant growth in both volumes and revenue.
“However it is important to note that foreign currency shortages constrained further growth as the business failed to fully supply the market,” Afdis managing director Cecil Gombera said at the company’s annual general meeting.
“The chaotic market reaction to the policies announced in October has resulted in price distortions and panic buying,” he said.
Gombera said the company’s foreign debt has been increasing over the months and the company appreciates the support from Distell, the major shareholder on extending credit limit and terms.
On segments, the spirits business remained the major revenue contributor for the company. Both brown and white spirits experienced supply gaps hence the slower growth rates compared to the rest of the business.
Gombera said performance of major brands was adversely affected by the erratic availability of bottles.
“The business will continue to support these strategic brands to protect their respective market shares.”
He said the recent launch of the Nikolai flavoured variants will boost performance of this category.
On the ready to drink segment, this category became the largest volume contributor to the total business.
Ciders performance during the first quarter was good, backed by consistent product availability and improved market place visibility.
Gombera said initiatives to exploit a sizeable on-consumption market segment are ongoing, further strengthening growth during the full year 2019.
On the wines business, volume and revenue for wines surpassed budget and grew on prior year during the first quarter, as a result of good supply of all wine brands.
He said demand remains strong as more consumers are attracted by portfolio offerings, especially the popular fourth street.
Market place for this brand will be intensified during the remainder of the trading year.
Going forward Gombera said the organisation will ensure product availability, market presence and will continue the supply of key brands.