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Annual sales were up 17% at listed spirits brand Distil, despite a 47% fall in fourth quarter volumes amid consumer spending pressures.

The owner of premium drinks brands Red Leg Spiced Rum, Blackwoods Gin and Vodka, and Blavod Black Vodka, said its full year revenues to the end of March were up 17% to £1.55m.

That growth was driven by pricing gains and volume growth of 8%.

However, there was a sharp reversal of volumes in the fourth quarter, with volumes dropping 47% year on year and revenues falling by 23%.

It said the fourth quarter is historically its quietest trading period, particularly in the UK, while its sales came in below the previous year primarily as major customers changed ordering patterns, particularly in relation to online sales.

It also experienced high Q3 sales into some customers, which has resulted in a higher than usual stock holding at those customers, and therefore lower sales out from Distil this quarter.

In addition, a temporary reduction in distribution in one key customer has impacted this quarter’s results. However, it said it does not expect this to be an ongoing issue and is working to restore orders to their usual level.

More widely, volumes decline across the total spirits trade, as consumers, facing continued spending pressures, are cutting back on consumption or turning to categories that are perceived to be less expensive, such as beer and cider.

Whilst the headline rate of inflation fell, prices within the UK are still increasing, particularly within spirits which, following the duty increase implemented in August 2023, is twice the headline rate, it said.

In tandem with this, the on-trade continues to contract, with around 16,000 outlet closures in the UK since March 2020 as venues come up against reduced staff availability, mounting utilities bills, cost of credit, and changing consumer habits.

Despite economic challenges being faced globally, in export markets we have grown our business 131% year on year for the quarter, with full year tracking at 26% year on year.

Overall gross profit increased 11% to £759k, with annual A&P spend down 15% to £496k.

Q4 advertising and promotional spend increased 78% to £130k, with the increase relating to in-market activation with export customers, new product development, and investment into activity which is expected to yield positive results in the current financial year.

CEO Don Goulding commented: “The company has faced a tough quarter of trading as the wider market continues to operate within challenging conditions, however the full year results remain positive, showing double-digit growth on the previous year.

“Despite a slower Q4 than expected, and the medium-term outlook for the spirits market remaining challenging, we are encouraged by the double-digit full year growth following the restructuring of the business over the past year.

“The team has been working diligently to set us up in a strong position to continue to build on this growth in the coming months, and I look forward to sharing updates on their efforts next quarter and beyond.”

Morning update

Domino’s Pizza Group has completed its deal to acquire the remaining 85% shareholding it does not already own in Shorecal, the largest Domino’s franchise business operating in the Republic of Ireland and Northern Ireland, for a total consideration of €72m (£62m).

The dela has completed following clearance by the Republic of Ireland’s Competition & Consumer Protection Commission.

As previously announced, 61% of the consideration is payable in cash, with the remaining 39% to be satisfied by an issuance of shares.

On the markets this morning, the FTSE 100 has edged back 0.1% to 7,954.6pts.

Risers include Virgin Wines, up 4.2% to 50p, Marks & Spencer, up 2.4% to 261.9p and Glanbia, up 1.4% to €17.76.

Fallers include Nichols, down 2.7% to 963.2p, Bakkavor, down 2.3% to 111p and Tesco, down 1.8% to 291.8p.

Yesterday in the City

The FTSE 100 ended the day up 0.3% to move closer to 8,000pts again at 7,961.2pts.

Tesco ended the day up 3.3% at 297p to wipe out seven consecutive days of losses, after a ‘substantial’ easing of inflation has helped drive a double-digit increase in profits, as the supermarket boosted market share and saw volumes recover.

THG plunged 11% back to 60.4p as revenues have fell amid ongoing attempts to turn around its fortunes by exiting lossmaking categories and prioritising profitable sales.

Other fallers included Ocado, down 3.4% to 367.7p, Glanbia, down 3.2% to €17.52, McBride, down 2.8% to 105p, Imperial Brands, down 1.2% to 1,680p, PZ Cussons, down 1.2% to 85.5p and British American Tobacco, down 0.4% to 2,308p.

Other risers included Tate & Lyle, up 3.4% to 631p, Just Eat, up 2.9% to 1,286p, Britvic, up 1.9% to 817p, Hilton Food Group, up 1.8% to 894p and Reckitt Benckiser, up 1.5% to 4,305p.