Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Nice gesture to reserve the first batch for shareholders too.
Excellent news, great to hear about the progress. Looking forward to trying the first liquid from Ardgowan. Would be great if they could get it on supermarket shelves with our RedLeg rum and I'm convinced our distinctive Blavod Black Vodka would look good on UK shelves too.
Full year cumulative volumes increased 8%
Full year cumulative revenues increased 17% to £1.55m (FY2023 £1.32m)
Full year cumulative gross profit increased 11% to £759k (FY2023 £683k)
Dr. Cooley obviously likes the prospects.
Results all a bit meh apart from cash is ok, exports creeping up, ardgowan soon, and global brands helping. Nothing more to do but wait for ardgowan and the next quarter results.
Always a bad quarter after Christmas. Have to console ourselves with the increased exports and the double-digit full year growth. Mildly excited to see what Ardgowan brings to the table over the coming year.
Terrible trading update, cash low
Bobby; many thanks for your two very useful and informative posts; a simple question, what share price would represent fair value for distil...
Best Regards DD
Sorry to return to old news but, for the benefit of any newcomers, I thought I should point out that the ''Current Distil stock price'' of ''168.17p'' quoted in the Alliance News article of 22 January 2024 would be well beyond our wildest dreams. It is unfortunately somewhat off target and the correct sp movements can be checked on this website.
pete.
A strong appointment by LST
https://www.linkedin.com/in/grahamcooley/
Share price 0.575....Bid: 0.45.....Ask: 0.70 shown here.
Shows 21% up with 56% spread this site , up on the day risers ??
That is why my broker has 0 move today.
That live 0.6288 offer taken 14/11/23 in ISA might turn out ok.
Must like this -
Global Brands will be servicing Distil's UK grocery, cash & carry, and convenience customers effective immediately. Utilising its extensive sales network, and proprietary logistics and warehouse capabilities, this new venture offers the opportunity to work closely with a long-standing partner to accelerate brand growth.
Distil's relationship with Marussia Beverages, who service UK on-trade and premium off-trade customers, remains in place.
In light of the new partnership, Commercial Director, Alex Baker, who previously led customer communications, will be stepping down from his role at Distil to focus on his consulting business effective from the end of March 2024. I thank Alex for the support that he has given the business during his time with us, and we wish him all the best in his new ventures."
Julian Atkins, Managing Director at Global Brands, commented;
"After a fruitful relationship collaborating on our ready-to-serve 250ml cans, we're really pleased to be working with the team at Distil on the distribution of its brands in the UK off premise. We've long admired the RedLeg brand with its eye-catching logo and great liquid so I'm looking forward further driving its availability, and that of Distil's other brands, for consumers."
Blue
Some things that need thinking about:
1. Distil declined the opportunity to increase their investment to £5m, likely due to lack of cash and need for a raise. Or was it due to Ardgowan not representing as good value as previously thought? My thought is that if Ardgowan was good enough for the initial £3m loan, with a raise supported by major shareholders, why not for another £2m after more progress has been made.
2. Ardgowan has been well supported with £1.2m equity investment from existing holders, £3m from Distil (24% owned by Roland Grain), £7.2m directly from Roland Grain and nearly £1m from the Scottish Government. There is tourist demand, export demand (for Scottish whisky) and hopefully inherent durability (should be around for decades to come). Ardgowan have recently agreed a £100m deal for a decade long supply of cherry casks.
3. Major shareholders of Distil: Roland Grain 24%, Cooley 7%, Rothschild 19%. It is likely that Distil moves in the director Roland Grain's choosing.
4. Distil has a market capitalisation of £4.4m. If Ardgowan was worth £30m, then in 10 years we might expect this to increase and over decades increase significantly, making Distil's chance at conversion increasingly valuable (depending on the success of Ardgowan).
5. We do not know if Distil plan to convert or not. Distil may have existed solely as a means to use public markets to increase funds for Ardgowan to Roland Grain's benefit, but not convert later (and thus reduce his own share of Ardgowan). Thinking it through logically, it might be Roland Grain's self-interest to not convert Distil's loan into equity as he already has equity in Ardgowan, unless the £3m outstanding is not available to pay back.
6. A best case scenario would be a conversion into 10% equity of Ardgowan after receiving interest back, a massively successfully whisky product for distil with production taken care of and the other brands growing and trading profitably. Of course, again much of this relates to understanding exactly what the directors have planned.
I know both these posts are very wordy. For full disclosure, Distil represents less than 1% of my portfolio. I've held for a few years and am thus holding at a loss. I do think Ardgowan seems opportune, although I am yet to research profitability, durability and prospects for Scottish distillery businesses, so have no idea if a £30m pre-money valuation is fair.
If anyone has any thoughts they would be greatly appreciated.
Similar to my previous post, I am increasingly valuing Distil based on its relationship to the Ardgowan distillery.
1. Although they have lots of brands and a track record of sales, espcially RedLeg, it is fair to say that these have struggled to achieve a consistent or significant increase in traction. The sales of each are probably still too small to attract a buyer, and most buyers (with similar or better distribution already in place) would likely be able to quickly create their own product. In sum, I think Distil's original stated strategy of building and selling drinks brands is not possible unless they have a blockbuster or nascent blockbuster brand.
2. That said, Distil remains debt-free and has a history of trading profitably/being cash generative (ignoring recent raises). For this reason and my first point, I ascribe neutral value to Distil's trading business and brands and even consider them in "run-off". Obviously, there is room for suprise to the upside here. More positively, there has been an acceleration in sales with Q3 looking to be similar to Q1+Q2 combined.
3. After a raise, Distil gave a £3m convertible loan at 5% pa to fund Ardgowan. I believe this was a good decision for shareholders. I am more concerned by the recent raise for working capital until March 2025. For the loan to Ardgowan, this equates to £150k in interest received per year for 10 years (£1.5m over the 10 years) and then the return of £3m loan OR conversion of this loan into a 10% equity stake into Ardgowan (convertible at £30m pre-money valuation). In my mind, it (would likely) make complete sense to convert into equity in the final year of the loan.
4. Production at Ardgowan Distillery is due to start in 2024. It is ancitipated to produce 1 million litres per year in the initial phase. Distil has claim to 10% of this production (of malt whisky or another product of their preference) for the duration of the loan, possibly initially equating to 100k litres.
So, a lot of the valuation of distil relates to:
1. Whether directors plan to convert the loan to Ardgowan into equity, and whether this will be worth it.
2. Whether Distil is able to use the production at Ardgowan to sell more drinks. As far as I know, Distil have not been supply constrained but demand constrained for their brands.
3. How the directors plan to use Distil to achieve their own aims and how this relates to other shareholders.
DaveT1,
The late reported 500,000 is an O trade, so was done by an MM, it could have been done earlier in the day as a buy, or done after the tick up as a sell, nobody can know, as they reported it after the close to hide what it was.
There's also a 700,000 O trade which appeared with a time of 16:02. It appears as 'unknown'.
Look at the price action. The price ticked up right after the 700,000 timing, why would it do that if that trade was a sell?
The BID was only 0.55 so why would a sell of that size get more than 0.55? To me they would get 0.55 or less, not 0.6. Buys the day before got a fraction over 0.6 and sells got a fraction over 0.55, so at 0.6 and with the tick up it has to be a buy.
So to me the 500,000 is unknown, but the 700,000 is a buy, as are the string of trades totalling 1,150,000. That puts buys well ahead of sells.
I also wonder why the string of buys were such small volume. 300,000, then 200,000, then 100,000, then a 150,000, then 50,000. It looks like they were finding it hard to get hold of stock and had to buy in smaller and smaller amounts. If so, that would make it very interesting if buying pressure continues.
Wow, that was a strange flurry of buys for a Friday afternoon. Still surprised and disappointed at the sell.
Bit of movement today!
"UK shares have been forgotten, overlooked, hated, ignored and despised, but they have one thing in their favour. They're incredibly cheap as a result.
The average S&P 500 stock is now valued at more than 32 times earnings. Typically, a valuation of 15 times earning existing as fair value, so that's pricey.
UK shares trade at less than nine times earnings, which is cheap. Basically, they're on sale, and bargain hunters are waking up to the opportunity.
Wall Street investment bank Goldman Sachs is now backing our stock market to outperform US and EU benchmarks.
It reckons UK shares will deliver a return of nine percent in 2024, beating the S&P 500, leading eurozone markets and Japanese stocks.
Goldman Sachs says the UK will continue to beat most rival asset classes for the next five years.
This is yet more good news and follows predictions that UK energy bills, inflation and interest rates will all fall sharply by the spring.
That could put a rocket under the UK stock market, lifting investor confidence, easing the pressure on businesses and encouraging consumers to spend more."
https://www.msn.com/en-gb/money/other/uk-stock-market-s-20-year-nightmare-is-over-now-it-s-set-to-smash-us-and-eu/ar-BB1he8by
If it's as big a success as those involved in the project are planning it to be, it'll be scooped up by a global spirits company. If that happens, DIS get their investment back plus a tidy profit.
Interesting to see what the medium term is here for ardgowan, possibly something for aquis / AIM in the future but when they have a few years trading behind them ?
Me too!
It sounds amazing what they are building, and such great ambassadors running the show too, I think it's going to easily multiply the value of DIS's investment into it, and DIS will get products from it too.
I have a number of shares in DISTIL. It has never made me any money and currently is well under water but I am holding them. I want to visit their distillery and cannot wait to see the 'Cathederal' . Its become a challenge....
Shandy, I’d be expressly concerned if we had the overheads of the supply chain necessary to facilitate national coverage, with our existing cash and mcap. It’s a very small outfit, with some promising brands, and huge potential to expand in the future. Steady, incremental and affordable growth is what I’m hoping for, with the added chance of a large player swooping in to snatch up the brands at a premium.
So i can buy in Cambridge and Edinburgh from a couple of specialist stores - hardly national coverage is it