Africa expansion pays off for Distell

Distell, the alcoholic beverages producer, has reported an 11.6 per cent rise in its headline earnings per share year-on-year for the six months ended December. The company continues to navigate difficult trading conditions, with a particular focus on its performance in Africa and international markets. Despite challenging domestic market conditions, Distell's revenue and profits have seen a significant increase. The CEO, Richard Rushton, highlighted the company's strong performance in South Africa, where resilience in revenue performance was evident from efforts to innovate and respond to market demands post lockdowns. However, what truly stands out in Distell's latest report is the remarkable growth in Africa and international markets. Rushton emphasized the growing importance of geographic expansion into Africa, where both revenue and volumes have seen substantial growth. With revenue up more than 19% and volumes up more than 20% in Africa, and revenue up more than 15% in international markets, Distell is becoming less dependent on its home country, South Africa. The company's strategy for the African continent focuses on measured growth across key countries, rather than making large investments in any single market. Distell has experienced strong growth in countries like Zambia, Mozambique, and Kenya, with notable performances in East and West Africa. The recent expansion of production units in Algeria and the success of operations in Angola demonstrate the company's commitment to regional expansion. In light of recent tax increases on alcohol and cigarettes, the industry faces challenges in navigating higher taxes and sales bans. Rushton expressed disappointment in the steep increase in excise taxes, highlighting the potential impact on revenue collection. Despite these challenges, Distell remains well-positioned across various price points and product categories to adapt to changing market conditions. Looking ahead, Distell is focused on continuing its dialogue with the government to address issues of alcohol abuse responsibly. The company remains committed to offering consumers in South Africa a wide range of choices in the marketplace while advocating for more measured approaches to regulation. Distell's strong performance in Africa and international markets underscores the company's resilience and strategic vision amidst a challenging operating environment. As the company expands its presence across the continent, it remains poised for continued growth and success in the future.