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Distell warns of up to 80% drop in full-year profits

The company, which makes wines, spirits and ciders, said the restrictions in South Africa in particular had had a significant impact on its business.
Image: Moneyweb

Distell said on Friday its full-year profits could drop by up to 80% due to the impact of the coronavirus, which has seen alcohol sales banned in its home market since March.

The company, which makes wines, spirits and ciders, said the restrictions in South Africa in particular had had a significant impact on its business. The country has enforced one of the world’s strictest lockdowns in response to the pandemic, including outlawing all alcohol and cigarette sales.

Distell said as a result its headline earnings per share (HEPS) – the main profit measure in South Africa – would be between 60% and 80% lower in the year to June 30. It reported HEPS of 652.9 cents a year earlier.

It added that this was based on currently available information and liable to change dependent on factors including what restrictions remain in place as the lockdown eases and any credit losses.

Distell was pursuing an ambitious plan to expand across Africa in hopes of becoming the continent’s premier drinks brand. It said it is now focused on minimising the financial impact of the coronavirus on its shareholders.

It said these efforts included a R2.85 billion ($154.9 million) increase to its banking facilities, an extension on excise duty payments and the deferment of R300 million of its capital expenditure programme so far, with all discretionary spending stopped.

“These actions give us confidence to manage the short-term challenges in order to position ourselves for a recovery once trading environments normalise,” it said.

Its shares were up 0.41% by 0722 GMT.

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Eish!

”I have taken more out of alcohol than alcohol has taken out of me”

(Sir) Winston Churchill

There is just no limit to the idiocy of the NCC. The government will of course also feel it in the tax coffers. And no amount of money for tourism will help in an alcohol free country. Whether we wear cardigans over our t-shirts or not.

Its bad.probably more job losses.another business damaged by government

Yaa. When you shut it for 2 months you dont just loose the profit for the 2 months. You make a huge loss that eats into the future profits. I take it the 80% drop is if they can start functioning again now. Not in another 2 months.

You have to be as thick as 2 short planks to do this to yourself and I am not talking about Distell.

Job losses in some industries are going to be huge. This one was 100% created by nonsensical rules, same as the e-commerce ban. Plain stupid. I suspect the deaths of people facing higher mortality once they have lost their homes and money is going to dwarf covid.

Government will also urgently have to start downsizing government employees to match the smaller tax base.

End of comments.

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