The share price of Distell South Africa’s largest listed wine and spirits producer, has gained 7,4% or R1,80 to reach its previous all-time high on Wednesday on the back of its bullish trading update, issued late on Tuesday.
At 4.30pm, Distell shares were quoted on the JSE Securities Exchange at R26, up from R24,20 at Tuesday’s close, with 6 933 shares having changed hands in eight trades. This equals the counter’s best-to-date highest level, previously reached on January 11 this year.
Distell owns such well-known wine brands as Nederburg, Fleur du Cap, Drostdy Hof, JC le Roux and Two Oceans. It also produces spirits, including brandies (Klipdrift), whiskies and rum (Captain Morgan), among others.
In its trading update, released after market close, Distell said it expects its earnings per share and headline earnings per share for the six months to the end of December 2004 to be between 30% and 40% higher than those of the year-earlier period.
The rise in earnings is largely attributable to an improvement in trading income and lower financing costs and foreign-exchange losses.
The update is encouraging, as it indicates that the company is overcoming the challenges presented over the past two years of a strong rand and anaemic growth in local wine consumption.
Distell has worked hard to raise efficiencies, cut costs and generally improve its production methods in the face of the appreciating rand, which has cut into its export margins.
The company expects to release its interim results for the six months to December 31 2004 on February 16. — I-Net Bridge