Distil revenue falls amid tough market conditions

19th Jan 2026 13:09

(Sharecast News) - Distil reported a decline in reported revenue in the third quarter of its financial year on Monday, reflecting distributor stock movements, despite strong growth in consumer-level sales of its core brands.

For the three months from October to December, revenue fell 26% year-on-year to £173,000, while volumes shipped into distributors declined 39%.

Gross margins were unchanged at 42%.

The AIM-traded company said volumes sold through to end consumers rose 36% over the period, highlighting a disconnect between retail demand and Distil's reported sales as distributors and retailers worked through inventory built earlier in the year.

Executive chairman Don Goulding said sales of RedLeg Spiced Rum by retailers to consumers across major grocery increased 36% year-on-year in the quarter and were up 28% in the four weeks to 28 December, despite a 4.1% decline in total take-home alcohol spending over the same period, citing grocery till data from Worldpanel.

He said store-level performance in grocery was buoyant, driven by promotional activity and supported by the launch of the new RedLeg packaging, which reached shelves in mid-December and boosted rates of sale.

In the on-trade, value sales increased 1.9%, although higher prices limited volume growth as operators passed through rising costs, including the 2025 duty increase, supply-chain inflation and higher staffing expenses.

Distil said consumer behaviour remained under pressure, referencing a January Barclays report that found 39% of consumers surveyed said rising costs prevented them from going out as often as they would have liked in December.

The company said stronger consumer-level sales were not reflected in third-quarter revenue as Christmas inventory was largely built by distributors in the second quarter and stock cover across the supply chain had since been reduced.

Export market revenue increased 7.5 times year on year, albeit from a small base, due to changes in order phasing in the group's largest overseas market.

Distil also confirmed that regulatory approvals had now been received from the US Alcohol and Tobacco Tax and Trade Bureau for Blavod Black Vodka, enabling shipments to the US market.

The company said it was working with its US distribution partner Aiko Spirits to ensure product launches and marketing support proceeded smoothly.

During the quarter, Distil also secured a significant on-trade listing for Blackwoods gin and vodka with the Buzzworks hospitality group, which operates 22 bars and restaurants across Scotland.

The company said the listing would see Blackwoods featured in multiple cocktails across the estate.

On strategy, Distil said the initial phase of its formal strategic review and cost structure assessment, supported by the fundraise announced in September, had enabled it to build Christmas stock, complete the RedLeg packaging refresh, establish an EU distribution solution and progress the Blackwoods Brand Home.

The company said it continued to review strategic options to maximise shareholder value in challenging market conditions.

Looking ahead, Distil said the medium-term outlook for the sector remained difficult, with a further UK alcohol duty increase due to take effect in February expected to weigh on consumer spending and delay recovery, particularly in the hospitality sector.

The company said it would continue to support customers across both on- and off-trade channels, with further momentum expected from the opening of the Blackwoods Brand Home by the end of January.

At 1211 GMT, shares in Distil were down 24.53% at 0.1p.

Reporting by Josh White for Sharecast.com.