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Distil plc

("Distil" or the "Group")

Final Results for year ended 31 March 2025

Distil plc (AIM: DIS), owner of premium drinks brands RedLeg Spiced Rum, Blackwoods Gin and Vodka, Blavod Black Vodka, TRØVE Botanical Spirit and Diva Vodka, announces its final results for the year ended 31 March 2025.

Operational highlights

·      Strategic partnership with Global Brands Ltd extended to include UK on-trade, giving Global Brands full distribution rights in the UK

·      Successful transition from previous UK distributor has led to gaining distribution with new listings secured in the UK on-trade (post year-end)

·      Blackwoods Brand Home first-fit completed in preparation for the open day held 20 June 2025 (post year-end)

·      Board strengthened with appointment of Addy Adebola (Finance and Operations Director) and Sarah Kingsbury (Marketing Director); Roland Grain (NED) retired from the Board to focus on his other business interests

·      Distribution partnership agreed with AIKO Importers, Inc to bring Blavod Black Vodka back to US market (post year-end)

·      Variation to terms of Ardgowan convertible loan investment agreed to facilitate opening of Ardgowan whisky distillery and laying down of first whisky stocks (post year-end)

·      Review of strategic options, to determine how best to support the Company in delivering long-term shareholder value, remains ongoing.

Financial highlights

·      Turnover decreased 32% to £1.04 million (2024: £1.52 million)

·      Gross profit decreased 46% to £394k (2024: £736k)

·      Volumes (litres) decreased 27%

·      Margins decreased to 38% (2024: 48%); one-off stock adjustment accounted for 8% of reduction  (2024: £nil)

·      Advertising and promotion spend decreased 14% to £444k (2024: £515k)

·      Operating loss of £1,232k (2024: loss £1,092k)

·      Net cash outflow of £188k (2024: £191k outflow) resulting in year-end cash reserves of £338k (31 March 2024: £526k); £650k (gross) successfully raised via equity fund raise during the year

·      Net assets of £5.68 million (2024: £6.37 million) at 31 March 2025

·      Fund raise of £755k (gross) via equity placing completed to meet near-term cash requirements whilst review of strategic options remains ongoing. £377k (gross) of fundraise proceeds conditional on shareholder approval (post year-end)

Don Goulding, Executive Chairman of Distil, said:

"The past twelve months have been a period of both challenge and distinct progress, as we navigate a changing spirits market while advancing our strategic growth initiatives.

Having been involved in the industry for many years I see the combination of increased operational costs, labour shortages and shifting social patterns as the most significant in a generation. In the UK, our biggest market, we've seen alcohol duty increase at its highest rate in 50 years and combined, these factors are driving inflation price increases to consumer, limiting spending, and our business has suffered along with the wider industry

The past year, in light of market conditions, was focussed on strengthening our core brands and we continue to protect our intellectual property in all operating territories, ensuring that our brands remain competitive and differentiated.

A major development is our partnership with Global Brands Ltd, which took on management of our full UK distribution in February 2025. While initial stock-build boosted Q4 results, longer-term impact will be seen in the financial year ending March 2026. We're confident that the move will yield positive results, as the business boasts a strong sales team with good national coverage across all key channels.

We have managed down overhead costs to help mitigate exceptional inflation in supply costs and continue to monitor these on an ongoing basis.

Looking ahead to FY25/26, we see reason for cautious optimism. Despite the challenges facing the industry, we believe that consumer confidence will start to return, and our brands are well positioned to benefit when the market returns.

Our expanded UK distribution network should begin to yield greater opportunities to drive volume and brand awareness in the on-trade, and our efforts to establish strong promotional plans in the off-trade will ensure we are able to build the brands in this channel.

We will continue our proactive approach to cost management and regular review of strategic options to ensure that the business is positioned for growth and delivery of shareholder value. "

For further information:

About Distil

Distil Plc is quoted on the AIM market of the London Stock Exchange. It owns drinks brands in a number of sectors of the alcoholic drinks market. These include premium spiced rum, vodka, and gin and are called RedLeg Spiced Rum. Blackwoods Vintage Gin, Blackwoods Vodka, TRØVE Botanical Vodkas, Blavod Original Black Vodka and Diva Vodka.

Chairman's statement

Performance

The past twelve months have been a period of both challenge and distinct progress, as we navigate a changing spirits market while advancing our strategic growth initiatives.

In the UK, our biggest market, we've seen further alcohol duty increases, a rise in employer National Insurance contributions and above inflation increases in power costs, cost of goods and minimum wage. Together, these additional taxes and operational costs have placed significant burdens on the industry, especially in the hospitality sector where we have seen many closures.

Against a challenging economic environment, consumer confidence has remained fragile and disposable income remains under pressure due to cost-of-living inflation. As a result, our business, along with many others, has suffered, and we're disappointed to report that revenues decreased 32% year-on-year, as reported in our trading updates.

Having been involved in the industry for many years I see the combination of increased operational costs, labour shortages and shifting social patterns as the most significant in a generation. This can however lead to new opportunities and fresh growth if the operators are given fair chance. Successful hospitality entrepreneurs tune in to their customer needs and are therefore able to adapt if given an environment where they can thrive. I share the belief that the benefits of a buoyant hospitality industry to physical social interaction, community and local employment are significant, and the industry should be better supported.

We are engaging with those industry bodies that are seeking to engage with government to listen to their needs. We're hopeful of period of political and economic stability to help restore consumer confidence in the medium term.

Distil plc remains focused on building an agile, low-overhead business centred on proprietary premium spirits brands. Our core portfolio: RedLeg Spiced Rum, Blackwood's Gin & Vodka, Blavod Black Vodka is the foundation of the business. The past year, in light of market conditions, was focussed on protecting and strengthening these core brands and we continue to protect and strengthen our intellectual property in all operating territories, ensuring that our brands remain competitive and differentiated.

A major development is our partnership with Global Brands Ltd, which took on management of our full UK distribution in February 2025. While initial stock-build boosted Q4 results, longer-term impact will be seen in the financial year ending March 2026. We're confident that the move will yield positive results, as the business boasts a strong sales team with good national coverage across all key channels.

Marketing and new product development

Echoing the overall business focus to stabilise through the turbulence, marketing this year was primarily directed towards volume-driving activity at point of purchase, such as in-store media in our major grocery customers.

Elsewhere, our direct-to-consumer channel was refreshed to make it easier for consumers to shop our brands. This included moving the e-commerce platform to enable greater flexibility of design and increased marketing function to better connect with and target consumers across the stores.

Results have been encouraging, with triple-digit uplifts vs the previous year across redlegrum.com. We continue to see digital marketing and e-commerce as a key channel for the brands to reach and retain consumers and will continue to invest in these platforms in terms of digital advertising.

In addition, we will continue to explore expansion of the range offered on these platforms, including exclusive formats, such as the RedLeg tasting gift set - a 5cl bottle of each core product (4 miniatures) - which launched this year, and merchandise. These additional formats allow consumers to trial products at a lower cost and foster greater engagement with the brand through merchandise. The channel offers higher gross margins, which will be re-invested into brand activity.

The year saw significant progress made at the Blackwoods Brand Home at Ardgowan Distillery, with structural and first-fit concluded. The final stages of opening, including final fit (furniture, finishes), are underway, and we hope to begin welcoming customers in Q3 2025 for tours and tastings, as well as bar service and retail. We will also begin to develop a range of distillery-exclusive bottlings and merchandise as part of this offering.

The new UK on-trade distribution partnership agreed with Global Brands in February 2025, will see an increased ability to activate in the on-trade as distribution grows, driving awareness and sales of our products in more venues.

As consumer confidence begins to grow, we hope also to return to consumer-facing events to drive brand awareness and foster demand in both the on and off-trade channels.

As our focus is on building our core brands, we have taken the strategic decision to pause larger scale new product development, such as new-to-world brands, to focus budgets on maintaining and growing the existing portfolio.

Ardgowan

Works made good progress this year at the Ardgowan whisky distillery, with a grand opening event having taken place on 20 June 2025. The first whisky distillation marks a significant milestone in the journey, and the team is now working diligently to produce liquid that will be laid down in casks to be bottled under the Ardgowan brand once it comes of age.

The total investment into the site currently stands at over £28m.

As shareholders will be aware Distil invested £3m into the Ardgowan Distillery project in 2021 in the form of a convertible loan (convertible into Ardgowan equity at a fixed pre- conversion valuation of £30m representing 9.09% of Ardgowan's fully diluted share capital) to support the development of the new Malt Whisky distillery. The strategic investment provides the Company with a long-term interest in a growing premium category, ability to develop our own Malt Scotch, as well as providing a home for Blackwoods Gin with its own distillery, Gin school and visitors' centre.

Blackwoods production has already commenced on site and fit-out of the brand home experience is underway. Once open to the public, the Blackwoods brand home will provide an important new revenue stream for the business.

Cost Management and Operational Efficiency

Over the course of the year, we have taken proactive steps to mitigate the pressures of increased cost of goods to ensure we're still offering value to customers. We are closely monitoring market conditions to adjust pricing strategies where needed and are exploring all aspects of cost management. This approach allows us to address external inflationary pressures while carefully managing discretionary spending, balancing the need for brand growth with fiscal responsibility.

In addition, the partnership with Global Brands to manage full UK trade has operational benefits, as we are able to better manage our haulage costs.

Equity Fundraise

In October 2024, we successfully raised £650,000 gross proceeds through a placing and subscription of new ordinary shares at 0.12p per share. This capital strengthened our balance sheet, providing the resources necessary to service customers with stock at the busiest time for then business and support key growth initiatives, including the expansion of our brand portfolio, and development at the Ardgowan Distillery. I would like to thank our existing shareholders for their continued support and welcome new investors to the Company.

Strategic Review & Actions

It was announced in March 2025 that in order to address the challenging market conditions and ensure long-term shareholder value, we were undertaking a strategic review which includes but is not limited to the potential sale of unused intellectual property, exit options for non-core brands, and seeking near-term funding, as well as close review of business overheads and cost of goods.

This review is ongoing to ensure that all options have been given due attention to ensure the best outcome for the business.

Post balance sheet events

After the year end, on 15 June 2025 we announced a variation of the terms of our loan investment in Ardgowan such that, effective from June 2025 the loan earns Distil an annual coupon of 6.5% and, on conversion, would give Distil a 10.5% equity ownership of Ardgowan.

As part of our ongoing strategic review, we also, on 12 September 2025 announced a successful equity fundraise, raising gross proceeds of £755k (£680k net of expenses) from existing and new investors.  We have received £378k (less expenses) of these proceeds with receipt of the balance subject to approval by shareholders at the upcoming Annual General Meeting on 30 September. Proceeds will be used to strengthen our balance sheet and provide general working capital for the business.

Outlook

Looking ahead to FY25/26, we see reason for cautious optimism. Despite the challenges facing the industry, we believe that consumer confidence will start to return, and our brands are well positioned to benefit when the market returns.

Our expanded UK distribution network should begin to yield greater opportunities to drive volume and brand awareness in the on-trade, and our efforts to establish strong promotional plans in the off-trade will ensure we are able to build the brands in this channel.

We will continue our proactive approach to cost management and regular review of strategic options to ensure that the business is positioned for growth and delivery of shareholder value.

Strategic report

Results for the year

The loss before tax attributable to shareholders for the year amounted to £1,101k (2024: loss before tax £942k).

The market continues to face headwinds from duty hikes and rising living costs, which have squeezed both consumer spending power and margins. A further increase in alcohol duty took effect on 1 February 2025, with duty on non-draught spirits rising by 3.65% in line with inflation. Despite these challenges, while year-on-year sales revenues and volumes fell by 32% and 27% respectively, performance improved in the final quarter, with revenues up 34% and volumes up 21% compared to the prior quarter. Gross margins experienced a decline to 38% (2024: 48%) primarily due to a write down of inventory which accounted for an 8% reduction and the continued increase in the cost of raw materials as our suppliers implemented price increases in response to inflationary pressures. In the short term, we anticipate our gross margins to remain subdued as we navigate through these cost increases. However, we are optimistic that margins will gradually recover towards previous year levels over the medium term. This is supported by the anticipated benefits from our strategic partnerships, streamlined operations, and the enhancement of our brand's premium status.

Advertising and promotional costs decreased in absolute terms by £71k from £515k to £444k. As a percentage of sales, advertising and promotional spend amounted to 42% (2024: 33%) during the year. This included the launch of two further seasonal RedLeg Spiced Rum Limited Editions in Grocery and online, as well as consumer-facing activity including a billboard advertising campaign in Brighton, supported by consumer sampling. Further, promotion at point of sale in grocery was increased, to increase rate of sale and recruit new consumers. In addition, following a successful relaunch of direct-to-consumer brand websites, support was put behind digital advertising to reach and recruit more consumers, driving increased revenues in these channels.

Cash flow

The operating loss, combined with net movements in working capital, resulted in a net cash outflow from operating activities of £1,017k during the year (2024: £1,018k outflow). Net movements in working capital were affected by a 14% decrease in inventory, reflecting a deliberate optimization of working capital and stronger operational discipline. In addition, the impairment of certain stock has further strengthened the quality and accuracy of our inventory position. Despite a temporary slowdown in sales, the company's proactive inventory control has preserved cash, reduced holding costs, and positioned the business to respond quickly to renewed market demand. These actions highlight management's commitment to operational efficiency and strategic readiness for future growth. Following gross proceeds of £650k (£596k net of share issue costs) from the equity fundraise in October 2024, convertible loan interest income of £150k (2024: £150k) from Ardgowan and modest capex to support operational efficiency and future growth, the Company's cash and cash equivalents decreased by £188k to £338k (2024: £526k) at the financial year end.

Balance sheet

The Group had net assets of £5.68m at the financial year end (2024: £6.37m). These included £3.0m of financial assets (2024: £3.0m), in the form of our investment in Ardgowan, further details of which are set out below, cash reserves of £0.34m (2024: £0.53m) and intangible assets of £1.43m (2024: £1.45m) including expenditure on trademarks related to our brands. Inventories decreased to £1.04m (2024: £1.21m) primarily due the optimisation of purchasing and production planning reducing excess and slow-moving stock.

Principal activities and business review

Distil Plc (the "Company") acts as a holding company for the entities in the Distil Plc Group (the "Group"). The principal activity of the Group throughout the period under review was the marketing and selling of RedLeg Spiced Rum, Blackwood's Vintage Gin, Blackwood's Vodka, Blavod Original Black Vodka, TRØVE Botanical Spirit and Diva Vodka.

During the 2025 financial year we encountered challenges in the form of a softer-than-expected UK spirit market, impacted by inflationary pressures across our supply chain and ongoing economic difficulties. Across the total spirits trade, volumes declined as consumers, facing continued spending pressures, cut back on consumption, or turned to categories perceived as less expensive, such as beer and cider. Although the headline rate of inflation fell, prices within the UK continued to rise, particularly within the spirit's sector. These pressures were exacerbated by the August 2023 duty increase, the largest tax hike in almost 50 years, and further impacted by the February 2025 duty increase, which raised excise rates on spirits in line with RPI inflation. Together, these duty increases have added to cost pressures and contributed to margin compression.

Our focus for the upcoming year is on driving revenue growth both domestically and internationally. In the UK, the establishment of our new partnership with Global Brands provides access to their extensive sales network, logistics, and warehousing capabilities, enhancing our service to grocery, off-trade, cash & carry, and convenience customers. This partnership represents a significant opportunity to collaborate with a long-standing industry partner, supporting accelerated brand growth and strengthening our market presence going forward.

We further plan to achieve growth through strategic marketing efforts, expanding our sales channels, opening new export markets, and introducing new products to the market. Concurrently, we are committed to ensuring that our overhead costs remain appropriate for the size and scale of our operations.

Key performance indicators

The Group monitors progress with reference to the following key performance indicators:

·      Sales turnover versus previous year

Total sales decreased £480k year-on-year to £1.04m (2024: £1.52m). Sales of RedLeg Spiced Rum which accounts for most of the sales revenue decreased 31% whilst Blackwood's gin posted a 50% decrease in revenue during the period. Blackwood's Vodka experienced a decrease in sales of 58%.

·      Contribution - defined as gross margin less advertising and promotional costs.

Contribution for the year decreased £271k to a loss of £50k (2024: £221k), a decrease of 123%. This decrease was primarily due to a 32% decrease in overall sales revenues whilst advertising and marketing costs fell 14% compared to prior year.

·      Gross margin versus previous year

Gross margin experienced a reduction to 38% (2024: 48%) mainly due to a write down of inventory which accounted for an 8% reduction and continued increases in the cost of raw materials.  We expect our adjusted distribution strategies to alleviate these cost escalations in the short to medium term. By capturing additional margin from the supply chain and focusing on the premiumisation of our brands, we aim to counteract the impact on gross margin.

We also closely monitor both the level of, and value derived from our advertising and promotional costs and other administrative costs. Advertising and promotional expenses accounted for 43% of revenue (2024: 34%) during the year, reflecting our continued commitment to investing in existing and new brand development.

Other administrative costs remained flat at £1.09m (2024: £1.09m).

Principal risks and uncertainties

As a relatively small but growing business, our senior management is naturally involved day to day in all key decisions and the management of risk.

The Directors are of the opinion that a thorough risk management process has been adopted by the Board, which involves a formal review at Board level of the principal risks identified below. Where possible, structured processes are in place to monitor and mitigate such risks.

·      Economic downturn

The success of the business is reliant on consumer spending. An economic downturn, resulting in reduction of consumer spending power, will have a direct impact on the income achieved by the Group. In response to this risk, senior management aim to keep abreast of economic conditions. In cases of severe economic downturn, marketing and pricing strategies will be modified to reflect the new market conditions.

·      High proportion of fixed overheads and variable revenues

A large proportion of the Group's overheads are fixed. There is the risk that any significant changes in revenue may lead to the inability to cover such costs. Senior management closely monitor fixed overheads against budget monthly and cost saving exercises are implemented wherever possible when there is an anticipated decline in revenues.

·      Competition

The market in which the Group operates is highly competitive. As a result, there is constant downward pressure on margins and the additional risk of being unable to meet customer expectations. Policies of constant price monitoring and ongoing market research are in place to mitigate such risks.

·      Failure to ensure brands evolve in relation to changes in consumer preferences

The Group's products are subject to shifts in consumer trends and the Group is therefore exposed to the risk that it will be unable to evolve its brands to meet such market changes. The Group carries out regular consumer research on an ongoing basis to carefully monitor developments in consumer taste.

·      Portfolio management

A key driver of the Group's success lies in the mix and performance of the brands which form the Group's portfolio. The Group constantly and carefully monitors the performance of each brand within the portfolio to ensure that its individual performance is optimised together with the overall balance of performance of all brands marketed and sold by the Group.

Future developments

We remain focused on four key growth drivers to maintain profitable brand growth and create value. These are listed below:

Brand activation and marketing at the point of sale:

·      Precise timing and frequency of promotional activity including occasions & gifting.

·      Bringing promotions to life and aligned with changing consumer needs.

·      Marketing and promotional activity tailored to local market needs.

Innovation in liquid & packaging development:

·      Pack sizes & formats, new brands, liquids, and flavours.

·      Limited Edition products.

Route to consumer:

·      Build long term relationships with capable local distributors in each key market.

·      Increase direct to consumer sales through website

·      Open new territories for each key brand, targeting premium growth markets.

·      Develop new trade channels through format and product.

·      Leverage Blackwoods brand home experience which will feature tours, a cocktail bar, and retail space.

Access to new production and design:

·      Across all aspects of distilling, bottling, and packaging.

Consolidated statement of comprehensive income

For the year ended 31 March 2025

Consolidated statement of financial position

As at 31 March 2025

Company statement of financial position

As at 31 March 2025

Consolidated statement of changes in equity

For the year ended 31 March 2025

Company statement of changes in equity

For the year ended 31 March 2025

Consolidated statement of cash flows

For the year ended 31 March 2025

1.   Basis of preparation and summary of material accounting policies

The consolidated and company financial statements for Distil Plc (the "Company") and its subsidiaries (together the "Group") are for the year ended 31 March 2025. They have been prepared in accordance with UK-adopted International Accounting Standards ("IFRS").

The financial statements have been prepared under the historical cost convention. The measurement bases and principal accounting policies of the Group are set out below.

Distil Plc is the Group's ultimate parent company. The Company is a public limited company incorporated and domiciled in England and Wales. The address of Distil Plc's registered office is 201 Temple Chambers, 3-7 Temple Avenue, EC4Y 0DT and its principal place of business is 73 Watling Street, EC4M 9BJ.

These results are audited; however, the financial information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated balance sheet at 31 March 2025 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended have been extracted from the Group's 2025 statutory consolidated financial statements upon which the auditor's opinion is unqualified. The statutory consolidated financial statements for the year ended 31 March 2025 were approved by the Board on 29 September 2025 and will be delivered to the Registrar of Companies in due course.

The financial information for the year ended 31 March 2024 has been derived from the Group's statutory consolidated financial statements for that year, as filed with the Registrar of Companies. Those consolidated financial statements contained an unqualified audit report.

A copy of the Annual Report & Accounts will shortly be available on the Company's website www.distil.uk.com and will be available from the Company's registered office.

2.   Loss per share

The calculation of the basic loss per share is based on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

The Company was loss making in both years therefore no separate disclosure for diluted loss per share is included as the effect of including the share options and warrants in the calculation would be anti-dilutive.

The earnings and weighted average number of shares used in the calculations are set out below.

3.   Segment reporting

The Directors have decided that providing a geographical split by two locations, UK and Export, offers an enhanced indicator of business activity. Only revenue and gross profit can be easily identifiable when splitting between UK and export markets. All trade is undertaken, and assets are held in one geographic location, being the UK.

The Group's revenue included 1 (2024: 2) customers making up more than 10% each during the year: