Distil Share Discussion Threads

[solardave] 27/12/2023 09:06

Peter, great post; thank you for some important insights.

What should we be looking for from the trading update. In terms of revenue what do you think a good result looks like?

Happy New Year, Dave

[petersinthemarket] 26/12/2023 12:50

My contribution above was not intended to imply anything, simply to lay out the MBG association with DIS as I currently see it. Speculation is fun, but atm I see no obvious sign of impending entrepreneurial activity. We do own a very successful rum so an outright purchase of DIS by MBG would make sense for them as imo the value of our company is largely tied up in the value of our rum label and they have shown an interest in extending their rum range. DIS is in the process of moving it's white spirit production from the Midlands to Scotland and MBG, who are still aggressively expanding, already own several sites in Scotland, including a distillery.

What is more opaque is Roland Grain's intentions. As usual, he is typically busy ploughing his own furrow and, although a significant DIS holder, he hasn't shown much interest in us. Although normally absent (he lives in Austria), he is also the owner of Ardgowan (private company) and all the signs are that DIS and Ardgowan will be working together more closely in the coming year. We both share the Inverkip site and access to the distillation and marketing facilities, the Master Distiller and the proposed whiskies.

RG owns just under a quarter of DIS and would need to increase that to over 30% before having to make any move but, even if that was his wish, it wouldn't be easy. 50% of DIS is in strong hands, in particular RG, Rothschild, HSBC and another nominee. There are also others, some of whom I am aware, who hold amounts just below the declarable level, but possibly significant in total. It is RG's normal practice either to own the whole of a small private company, or enough of a larger company to effect influence, but he always appears happy to leave local experts to run them. He has had a long expressed intention to be deeply involved in whisky and I suspect he is quite content with his current position.

Possibly more likely is a complete outsider. If RedLeg is any threat to another producer, our market value would be pocket change to any number of very large companies, including Don Goulding's previous employer Diageo, with their fake rum, Captain Morgan. Frankly, I don't expect to see any corporate move on DIS in the next 12 months, but I would personally welcome an approach. It is notable that April 2024 will mark DG's 70th birthday and the thought of future retirement must surely have crossed his mind.

For me, my only current interest is the level of our year-end business. This is by far the busiest and most crucial period for DIS and we must all have the same desperate wish for the New Year. After 10yrs with DG at the helm, DIS is still only a penny share and our hope must be that our BoD have at long last shaped the company into something potentially successful. The TU will be available in a few weeks time and , after the several serious blunders of the past year, I confess to feeling a bit nervous. Happy New Year all, peter.

[mikejoseph] 22/12/2023 07:54

Pete

Many thanks for a really useful post
Are you implying that MBG may want to buy DIS?

What's your view on the best strategy for the Loan to Ardgowan distillery?
[hxxps://www.distil.uk.com/news-page/distilbacksardgowandistillery]

Best
Mike

[haggismchaggis] 20/12/2023 12:26

Thanks Pete! All very intriguing!
.
I'd put my money on MBG manufacturing our spirits at it's other distilleries. This eliminates overseas shipping costs and import duties, keeping our products price competitive in many other markets.
.
There's options on how this would be structured. Licensed production with a percentage going to DIS. Contract manufacturer, where we pay them to produce and distribute. Or they link us up with their distilleries and we deal direct, leaving MBG just doing the sales and distribution in those countries.
.

[petersinthemarket] 20/12/2023 10:27

For good or ill, the fate of DIS is now in the hands of the two new business arms we have chosen, namely our in-house distribution to our key customers and our Marussia distributor for the rest.

It's very hard to get the full picture on Marussia as it is such a huge and sprawling business. The Marussia Beverages Group (MBG} is the beverages and hospitality arm of a highly diversified privately owned Swiss group called Sastre Holding SA. The holding group is owned by the Swedish Paulsen family with HQ in Switzerland. The billionaire Frederick Paulsen was knighted by the Queen in 2021.

MBG is an international producer and distributor of artisanal spirits, wines and Japanese sakes, with 14 fully owned distribution companies in 14 core markets including USA, UK, France, Russia, Ukraine, Georgia, Switzerland, Austria, Germany and the Netherlands. It has 16 production sites around the globe, creating high quality, innovative premium brands. It markets its brands in at least 40 countries, with centralised sales and marketing and over 1200 employees, 28 of whom are in Marussia Beverages UK Ltd, our main contact.

Even a brief look around suggests that we have made an agreement with part of a very large, complex and aggressive group who are still growing strongly through acquisition and agency agreements. MBG started small around 2004, selling vodka in Russia, but in the decade from 2012 to 2022, the urge to grow larger saw the company's revenues surge dramatically from €7m to €294m. In addition to their many own-brands they act as distributor/agent for several companies that everyone has heard of like Remy Cointreau, William Grant and Schlumberger.

MBG either owns, or co-operates, with many distilleries in several different countries in Europe and Asia. Also in Scotland, where it is the owner of Mossburn Distillers, the company behind Torabhaig distillery on Skye, plus two malt and grain distilleries in Jedburgh in the Scottish Borders. They have particularly strong links within their Swiss/German/Austrian business centre. I smell the hand of Roland Grain in this somewhere, but despite an intensive search, I have yet to find any solid link.

In the UK MBG state that their business is about 40% off-trade and 60% on-trade. For DIS they will distribute RedLeg, Trove, Blavod Black Vodka and Blackwoods gin and vodka.

MBG believe they are under-represented in some spirits, including rum, and plan to fix it, either by acquisition, or by setting up their own production facilities in a suitable market area.

The holding group is currently said to be in deep discussion on their future, as they believe their rapid expansion has led the company to an important inflection point in their development, where they may soon have to decide whether to stay fairly agile at their current size, or to continue aggressively acquiring in order to grow much larger. Their options are either hands-on, as now, with centralised management, or a more decentralised organisation of autonomous international branches.

For now, it seems that the plan is to continue with aggressive growth and their USA arm has just acquired Watershed Distillery for an undisclosed sum, giving it its first spirits production site in the USA.

We live in interesting times.
pete

[haggismchaggis] 18/12/2023 23:42

Lack of available stock? Or just a rerating going on?
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Something said at the General Meeting that has given buyers the confidence to load up, or the NOMAD/MM to walk it up?
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£6.56m MCap, still cheap if the sales get back to what they were before the change in distribution.
.
2m traded, up 0.1p - 18 December
4m traded, up 0.1p - 15 December
5.3m traded up 0.25p- 12 December (funding news day AND General Meeting)

Almost doubled in price since the fund raise and General Meeting, 0.4p to 0.725p

[petersinthemarket] 18/12/2023 10:13

Although very welcome,
I do not understand
what exactly is lifting the share price

[lr2] 17/12/2023 18:27

Working link for the above post.

[solardave] 17/12/2023 18:04

Ardgowan Distillery appoints sales and marketing director

"Inverclyde-based Ardgowan Distillery has appointed David Keir as Sales and Marketing Director as it begins construction on its £20 million state of the art ‘cathedral of whisky’."

[hxxps://dramscotland.co.uk/2023/12/13/ardgowan-distillery-appoints-sales-and-marketing-director/]

[mikejoseph] 16/12/2023 14:08

Blackwoods Gin, online sellers:

[

[mikejoseph] 16/12/2023 14:06

Blavod Vodka online sellers:

[

[mikejoseph] 16/12/2023 14:02

RedLeg online sellers:

[

[mikejoseph] 16/12/2023 13:56

Both Sainsbury's and Tesco selling RedLeg online; Tesco have the Red bottles in most of the Big stores I have been in; will check my local Sainsburys. Haven't seen Blavod or Blackwood anywhere; are either of these sold in supermarkets?

[thepopeofchillitown] 14/12/2023 08:36

The limited edition bottles of Red Leg are now on the shelf in my local Sainsbury's. At least it shows there's a turnover of new stock. With all the talk of it not being available in various locations I wasn't sure if my local store wasn't just clearing old stock. Not a fan of the bottles personally.

[petersinthemarket] 12/12/2023 17:05

Maybe it's just that they are less likely to run out of cash now. That half a million squandered on a daft advert would have been useful. Sufficient stock for everyone who wants it and efficient deliveries is the whole story now. Fingers crossed.
pete

[haggismchaggis] 12/12/2023 14:35

I also wonder what was said at the meeting that could have caused this rise.

[haggismchaggis] 12/12/2023 14:32

Pete, I think the shortage is partly putting demand into faster moving locations, but also that DIS were restricted on production levels, which was one of the reasons for the fund raising. Seems like they should have done it a month earlier, so they could get the stock in place by now.
.
"The Fundraising will provide working capital to enable Distil to service customers with stock at the busiest time for the business and allow it to support its growth plan to the end of March 2025."

[petersinthemarket] 12/12/2023 14:04

As to stock, it looks like my home county, Pembrokeshire, is being triaged! No stock in any of the big stores and they all appear to have delisted all DIS products. I hope the stock issue is due to heavy demand elsewhere. At this time of year they should be selling everything they can make. I'd love to have a look around their production facilities.
pete

[petersinthemarket] 12/12/2023 13:59

Just took a look at 1:56pm.
3424sh available at 80p.
Really taking the p... on this spread.
If I wanted to buy (and I don't) I would wait for some while for the interest to flag again.
pete

[haggismchaggis] 12/12/2023 13:42

Hi Pete,

Good to see you are still here!

I did average down a lot and am already showing a paper profit (that was my plan), but holding for the real money once the sales figures are sorted out and the distillery up and running and producing our spirits including whisky, at that point it could be multiples of where it is now, so worth the hold IMVHO.

For new buyers or those looking to average down, it's probably never going to be this cheap again, although we've said that before, it is still priced to fail, and is very unlikely to do so now it has the cash to get to another level operationally. That's if anyone can find any stock anywhere!

[skinny] 12/12/2023 13:37

Have been in since 2013, I also won't be adding anymore - 10 years is long enough!

[petersinthemarket] 12/12/2023 13:35

Hi Haggis - Good to see you back. I haven't bt for a long time now and I have no interest in taking on more. Too many strategic and dilutive errors by the BoD. Just sitting pat and in far to deep already, but the mtg result is doing wonders for my savaged bottom line. Can hardly believe it, but still a long way to go yet. Xmas/NYear sales are absolutely key to any substantial or permanent advance.
pete

[skinny] 12/12/2023 13:28

I can get a quote (0.75p) for up to 100k - nothing above.

I'm only 70% down now 🙄

[haggismchaggis] 12/12/2023 13:01

Can't get none here, Negotiated Trade only.

[petersinthemarket] 12/12/2023 12:41

Sorry mate, far too busy with AAZ and EEE atm