Distell has lost R4.3 billion in revenue due to Covid-19 restrictions on sale of alcohol
To improve the liquidity of the group, Distell has temporarily suspended the payment of dividends.
On Thursday, 27 August, Distell suspended its dividends as its full-year profit fell 64 percent following restrictions on alcohol sales in South Africa.
The wine, spirits and ciders producer said in a statement that it has lost R4.3 billion in revenue during the year to end 30 June.
Distell group CEO Richard Rushton said, as part of measures introduced to improve the liquidity of the group, the board has taken the decision to temporarily suspend the payment of dividends.
Richard said that SARS provided payment relief by extending excise duty payment terms by 90 days. Distell also made good progress on the sale of its two premium wine farms, Alto and Plaisir de Merle, which are classified as held for sale.
The group has negotiated with its key funders to increase debt facilities to R7.75 billion to provide sufficient short-term liquidity.
The group reported a decline in headline earnings per share from 652.9 cents per share in 2019 to 235.3 cents per share for 2020.
Since trading resumed on 1 June, Distell has seen increased debtor payments, which has “buoyed” the group’s cash flow, enabling it to pay key suppliers.
“We will continue to support vulnerable customers and suppliers with customised credit or payments dependent on their size and liquidity constraints,” said Richard.
To further lighten the strain on liquidity, the group deferred over R300 million of capital expenditure while limiting all discretionary spend.