KWV Investments sees earnings up

An interim dividend of 173c per share was declared, 20.1% up on the 144c dividend for the comparable period last year.

In the six months under review Distell's revenue grew by 21.6% to R6.1-billion, on a sales volume increase of 15.9%.

Benefits derived from improved throughput and efficiencies were largely offset by steep increases in material costs and distribution expenses as well as incremental costs to expand sales and marketing representation in important markets.

The company said KWV Investments' results reflect this improved performance and attributable earnings for the six months under review increased by 17.7% to R189.779-million from R161.284-million in the comparable 2007 period.

It said the board of Distell had indicated that South Africa's economy and its consumers "continue to adjust to the unfavourable impact of a highly troubled global economy, the increase in debt-servicing costs, and a moderation in real disposable income."

It added: "The deterioration in the global economy is expected to continue with major economies now in recession. An early end to the depressed conditions seems unlikely.

"Distell, therefore anticipates that global and local trading conditions will become increasingly difficult.

"Nevertheless, its board believes that the business is appropriately structured to compete effectively under these conditions.

"It has a portfolio of attractive and reputable brands across a range of segments and price points affording it the flexibility to adjust to changes in consumer spending and to capture opportunities in key established and newer markets.

"A broad network of trading alliances across a diversity of markets, some less adversely affected by the global credit crunch than others, should also provide Distell with a measure of resilience.

"Although it is extremely difficult to forecast under current volatile conditions, Distell nevertheless expects to reflect continued growth in revenue and earnings, albeit at moderate levels."

The company added: "These expectations will largely be mirrored in the results of KWV Investments."

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