Competition, low consumer spending weigh on results

DISTELL Group cited yesterday increased competition and curtailed real consumer spending after it recorded muted growth for its first quarter of the new financial year ending in June 2017 compared with the corresponding period in the previous financial year. The leading producer of wines, spirits and ready-to-drink alcoholic beverages said the first three months between July and September 2016 were characterised by slower economic growth in its South African operations. In the continent, Distell said it achieved good revenue growth in Mozambique and Zimbabwe. But the overall performance was negatively impacted on as it continued to feel the effects of the economic slowdown across many parts of the continent, including Angola, historically its biggest market in the region. Distell said Taiwan was showing good growth, with Europe and the rest of Asia remaining challenging and highly competitive in the international markets. “The outlook for economic growth remains uncertain and trading conditions are expected to remain unpredictable and volatile domestically and in our traditional international export markets,” Distell said. “The group continues to drive efficiencies and cost reduction to protect margins.” Distell Group is the producer and marketer of spirits, fine wines, ciders and ready-to-drinks employing about 5 300 people worldwide with an annual turnover of R21.5 billion last year, an increase of 9.6 percent. Shares fell 1.89 percent to close at R167.36 on the JSE.