Spirits group Distil is exploring funding options to meet an unexpected shortfall in its finances after it issued a profits warning for 2024.
The trading update for the owner of RedLeg Spiced Rum, Blackwoods Gin and Vodka and Blavod Black Vodka revealed revenues plunged by 55% to £204k in the four months to July.
Management of the London-listed group said they had expected lower sales during the start of the financial year but admitted the results were worse than forecast.
Distil blamed a downturn in the global spirits market as consumer spending power was hit by the cost of living crisis.
Executive chairman Don Goulding said the backdrop had created “an immediate short-term funding need” within the business and added that the board was currently exploring options.
The group downgraded its full-year profit expectations but said it remained positive versus the performance in 2023.
Shares in the penny stock, which trade on the AIM junior market of the London Stock Exchange, collapsed 45% today on the back of the update to just 0.23p.
Goulding called the performance in the first four months of the financial year “disappointing” and added the lower sales had been expected because of “phasing trends”.
He said the global alcohol market had been facing persistent challenges in recent years.
“The decline has been driven by an extraordinarily challenging economic environment, as consumers are faced with ongoing inflationary pressures, which are putting a strain on spending,” he added.
“While this is an issue affecting all global markets, for 2024, this has been exacerbated in the UK by the poor weather, leading to further curbs on socialising both in and out of home.
“The effects of these changes to consumer spending have been felt throughout the drinks industry, across all arms and at all levels, including our business.”
Goulding said the interests of shareholders remained “at the heart of all decisions taken by the board”.
“Further updates will be notified as required,” he added.
No comments yet