Distell Group said first-half sales growth accelerated as South Africa’s biggest wine and spirits producer achieved record festive-season trading due to discount offers while the weaker rand boosted the value of exports.
Sales by volume climbed 7.7 per cent in the six months through December, compared with 3.7 per cent a year earlier, the Cape Town-based company said in a statement on Wednesday. Net income gained 18 per cent to 1.2 billion rand ($76.5 million).
"Consumers responded positively to our product offerings and promotions, especially over the festive season," Managing Director Richard Rushton said in a statement. Revenue growth in South Africa, Taiwan and some African and northern European markets offset lower demand from Angola, the UK, Russia, China and Latin America, he said.
Sales received a boost from the declining value of the rand, which increased the value of South African exports. The rand has slumped 26 per cent against the dollar in the past 12 months.
Distell is expanding in the US with an agreement to combine spirits with that of family-owned Terlato Wine Group. Lake Bluff, Illinois-based Terlato is also importing four Distell wine brands, including Nederburg and Two Oceans.
Distell shares rose 2.9 per cent to 159 rand at 1:46 p.m. in Johannesburg, reversing an earlier drop and paring its decline this year to 3.6 per cent. The stock climbed 21 per cent last year. The company will pay an interim dividend of 1.65 rand, compared with 1.58 rand last year.
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