Distil Share Discussion Threads

[berny3] 25/1/2016 08:56

Pete GL. Been here a long time too. The quarterly updates combined with interim figures do give a good indication of the improvements in the financials and how the new strategy has benefited.

To be honest out of my whole portfolio this one has done the best over the last 12 months. Be glad you have not been a holder of blue chip miners and oil!!

Keep it fun.

[petersinthemarket] 24/1/2016 20:04

Many thanks for responses guys - more would be welcome - I appreciate that some people set great store by a quiet thread, but I don't. I prefer contributions from all points of view. imo there is too little real discussion on this thread. GL, pete

[dante17] 24/1/2016 17:22

Peter, just to clarify, Hi-Spirits is only the distributor in the UK. In the US the company has two other distributors, in Australia another one, in Spain another one and in central and Eastern Europe yet another on (for Blavod only). So there are already 6 major distributors for our products and a number of smaller ones. More will be added this year. So we r not so dependent on Hi-Spirits as u make out.

[waterloo01] 24/1/2016 17:03

Peter, very honest assessment. Personally (and not invested) the best hope is a take over by ANO who would buy the brands and approvals rather than sales or profits which I think will be very long way off.

[petersinthemarket] 24/1/2016 16:35

Hi Bernie - Yes, I can see how you would think 'negative'. It wouldn't be my choice of descriptor but I would happily accept 'ultra-cautious', having been seriously bitten in the bum, and I would also add 'frustrated' due to the lack of open and honest investor relations at DIS. I have been into DIS for quite some years, in fact since it was BLAVOD, and despite the large share price fluctuations during 2014, I still laboured under the mistaken belief that the company was cheap to buy and had enormous short to medium term potential, so with a roughly twelve month view I kept buying the dips and, to be honest, a few of the highs as well. I was completely wrong. Since then, the missed opportunity cost of my holding has been much too high. I am sitting on a very large (for me) holding with six noughts on the end and I am still well under water. Our new man from Diageo at first added a welcome shot of confidence and his promise of early break-even made it seem worth holding on. Since then we have never approached break-even and DIS has not even qualified as a 'penny share'. Without warning, the BoD announced a complete change of company name and sales policy and the share price understandably took a dive where it has languished ever since. There was no prior news on their intended in-house manufacturing policy despite the fact that it must have been secretly under way for a long time. It takes some while to set up plant and a distribution network and there is a considerable delay between laying mash and selling matured booze. There was no public discussion on their choice of a small-time distributor. The lack of at least one joint BoD member on DIS and Hi Spirits surprises me. Our futures are inextricably locked together. During the period of their liason with DIS, our distributor has announced a total of eleven BoD resignations and last xmas assembled yet another reshuffled board, this time mostly Americans. As it is on AIM, I give DIS a little credit for publishing quarterly reports but if you read back over them they have in fact told us almost nothing of any importance. Nothing useful about profit progress or profit splits or their distibutor contractual arrangements and nothing by which we can accurately calculate progress towards break-even, now two years overdue. It is an odd measure of our future view of DIS that something as low as break-even seems an acceptable target. There is little or no discussion about rising profits or a rising share price However, there is a glimmer of slightly brighter news at the end of this long tunnel. Judging by the gently rising share price chart during the last 3mths the market is now beginning to factor in a little more confidence in the future of DIS and our chance to estimate some of that future is coming very soon as the year-end results in a couple of months time should at last give us some worthwhile data to work on. For myself, even if/when break-even arrives, I think DIS is still in for a very long haul in a very difficult and crowded market and if/when I pass my average cost I will start to unload a large proportion of my holding in order to place the capital more profitably elsewhere. GL all, pete.

[petersinthemarket] 24/1/2016 16:29

Hi Berny - I have posted a little of my Hi Spirits research above. I hope someone is actually reading it. It is a small private company with yet another reshuffled BoD. The importance of effective co-operation with DIS cannot be over emphasised. pete

[berny3] 22/1/2016 19:50

Pete you seem a little negative. Don't know anything about Hi Spirits other than what I follow on Twitter and have spoken to some independents who use them. Nothing but praise - but best you do your own research.

[petersinthemarket] 22/1/2016 18:38

Nice try Bernie - a well out of date bit of back slapping. And Jeremy Hill is no longer there; resigned or sacked last year when the Yanks moved in. Is anyone going to debate facts rather than marketing schmooze? Have a good weekend, pete

[berny3] 22/1/2016 16:33

PIM - Taken from their web site:

"Welcome to our World.

We’re proud to say we do things a little differently to other drinks companies.

Our mission is to offer the right brands to the right customer. We look at an opportunity first and then the brand, ensuring successful long term listings that drive volume.

We have relationships with businesses of all shapes and sizes – national, independent, on-trade wholesale, retail and global brand-owners. We work with them to offer solutions and also excite them with new innovation.

A judge at a prestigious award-ceremony recently said, “if I was in the spirits business, this is the type of company I would want mine to be.”

We have an incredibly talented team that is highly experienced, insightful and dedicated to giving you the answers and enthusiasm you need.

However, if you feel that I can help you specifically, please don’t hesitate to contact me at [e-mail].

Jeremy Hill
Chairman"

[petersinthemarket] 22/1/2016 15:49

We have two different companies to watch here, the producer and the distributor, and we are dependant on both working well together for our success. This raises obvious questions. For instance, if the distributor really does go hell for leather, can production keep up? It would be interesting to know the production capacity at DIS. Does anyone know the typical time from mash to sales for any of these brands? Is distribution exclusive to Hi Spirits? Does anyone know whether this arrangement is usual for booze companies? Or do the bigger companies normally handle their own distribution? I'd like to know the profit split between the two companies, especially in sales to the big price cutters. I'm rather surprised that DIS does not have someone on the BoD of Hi Spirits, or vice versa. A quiet afternoon, so just rambling out loud!. GL, pete.

[petersinthemarket] 22/1/2016 13:06

Bernie - thanks for name of distributor. I have taken a look at them.

Hi Spirits Ltd
Company Number : 04509791
Private limited by share capital
Incorporated on 13 august 2002
SIC 2007: 46342 - wholesale of wine, beer, spirits, other alcoholic beverages
Registered at: 174 Terrace Road, Walton on thames, Surrey, KT12 2ED
Trading from: Hi spirits towers, 174 Terrace Road, Walton on Thames, Surrey, KT12 2ED
Tel: [phone]

Until the end of 2015 there were seven directors most of whom were also directors of another company in exactly the same category (SIC: 46342) called H1llo Ltd. All but two of these have since resigned and the new board seems to have had an American takeover. The previous Directors all had a small number of shares in the business. I am not sure whether these have been sold on. Daniel Bolton still seems to have a small number of share options but apart from him I dont see anyone with real skin in the game.

Mark Brown (USA) - apptd 30dec2015 - Company President
Steven Wyant (USA) - apptd 30dec2015 - Company Vice President
Daniel Bolton (UK) - apptd 1may2013 - Managing Director
Guy May (USA) - apptd 11jan2016 - Director
Magdalena Ewa Tadych (Polish) - apptd 12sep2011 - Director
Paul Pape (USA) - apptd 30dec2015 - Treasurer
Currently trying to recruit a Marketing Director

Accounts for the year ending 31 March 2015:

2015 2014
Sales £16.5m £15.1m
gross Profit £3.4m £3.3m
Operating Profit £152.7k £156.6k
Post Tax Profit £51.8k £31.5k
Operating Cash (-£183k) £46k
Gross Profit Margin 20.8% 22.2%
ROCE 20.09% ?
Debt to Capital 93.09% ?
No of employees 41 33

As far as distribution goes we are more or less at the mercy of this company so I hope they are at least as successful under new mgmnt in 2016/17.

Since I am not an accountant, if someone with suitable skills would like to take a look at this I would be most interested in comments.GL, pete

[haggismchaggis] 22/1/2016 11:37

I have a lot more confidence that DIS will become a profitable company with steady growth year on year, than I have of a lot of other AIM companies even becoming profitable. The risk in DIS is reducing fast too.

[berny3] 22/1/2016 10:47

DC I think it is very delicate between loss/breakeven/profit. Any monthly loss is substantially reduced and I think cash is fine.

From the statement it looks like gross margins should be being improved further. If I keep at the same Gross margin as last year for FY. I get circa £10K profit for the second 6 months.

I agree though that the overhead is a little bit of a guessing game.

Cash is the most important and I feel there are not issues concerning cash. The growth looks to be manageable and the company is pushing in the right direction.

[petersinthemarket] 22/1/2016 10:44

Good news, but still frustratingly slow.

I'm also curious about that after hours buy. BoD leakage again? The general market certainly did not know there would be a TU this morning. I assume an after hours trader cannot be a private investor but anyone lucky enough to have bought last night and sold first thing this morning could have pocketed around a 20% overnight gain. Whilst some of us are still sitting on a hefty loss after several years of waiting I do wish this company's BoD were more water tight.

Still, based on this TU perhaps we now have a 50/50 chance of break even at the year end. Lets hope the distributors continue to work hard. GL, pete

[haggismchaggis] 22/1/2016 09:51

asscurious fails again. It'll be 1.5 soon enough.

[ramridge] 22/1/2016 09:36

Broker Forecast is actually a small loss this FY16 : PTP -0.10m and EPS -0.02. But they do expect a small profit for FY17: PTP +0.03m, EPS +0.01.

If they meet broker forecast this year (financial year ends 31/3), well and good. I think they can manage that.
But if they go well into positive territory in FY17 then the share price will rise substantially. So the question to me is, have they got the momentum and strategy in place to go places n 2016? I don't know enough about this company to say.

[mortimer7] 22/1/2016 09:02

I know it has been frustrating holding DIS stock, but this update confirms good progress and building of momentum. The numbers mentioned today are a guide - so what if they achieve a small loss or breakeven at this point, it's evident where this is going. Let's look ahead now that the strategy is almost in place.

[asturius101] 22/1/2016 08:58

Well just dumped everything i bought in the .80's, imo this aint going nowhere fast gl

[dietcoke197] 22/1/2016 08:39

Unfortunately, I'm not convinced those numbers are good enough to hit breakeven in this period.

My model required 89% sales uplift to reach breakeven. I reckon on a £38,000 loss for the 6 months to march based on a 60% gross margin and £155,000 promo spend.

Of the two, the promo spend is the big unknown, there are no numbers I know of to base the 96% rise against so I've had to extrapolate from the last annual results.

They really need that TTB approval to continue the momentum.

[kmann] 22/1/2016 08:39

DIS certainly no drink problem here. Going to be a giant imo

[dante17] 22/1/2016 08:30

So we r looking at breaking past the one million pounds in revenue point for the current fiscal year, which will certainly be a landmark given that all of that income will for the first time be from 'own products' and not from distributing third-party brands.Well before March we will also hear of RedLeg having been approved for the US market, allowing for shipments to begin in Q1 of the next fiscal year.I also expect the launch of an entirely new brand in the spring aimed at South America.And what with breakeven all but certain now, we have lots to look forward to. No wonder then there's plenty of buying going on right now.