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What will be interesting to see is what they were referring to in the press release around a new product announcent. This share issue will ensure the firm's survival, but a new product announcement could actually put some energy in the share price for a change.
I think it's just that they plain old ran out of cash. No conspiracy here unfort...
Tthe stock is trading below book value because investors fear bankruptcy due to the dwindling cash pily, and that fear will be removed if shareholders approve both resolutions so that Distil receives the cash that they need to survive. I would definitely like to receive back the funds I invested (or most of it), and hence I will be voting in favour. The new funds will give the firm time and space to try to make something happen, and it should definitely put a floor in under the share price immediately.
I don't see the below as any error in cash flow forecasting, to me it's either demand led or it's that they now have bigger growth plans than they had before?
"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"
Sounds more like they have made significant errors in their cash flow forecasting
Let's see what the XMas figures are, as they need the money so they can fill the demands of the clients, which suggests some decent level of orders, which we'll only see the numbers for in the post XMas or Q1 trading update.
Distillery pretty much the plaything of Grain now, subsidising and supporting wider business objectives.
Don using DIS as a pre retirement hobby, execution of the change in business model seems very poor.
Cannot understand the timing here unless they are down to pennies as this time of the year is when they are most stretched on cash.
The share price is at enough of a discount as it is. It's just one blunder after another. Don has proved to be absolutely worthless, new leadership needed.
See RNS and then this:
https://www.linkedin.com/mwlite/profile/in/grahamcooley
A good reasoned post. Thats why I still hold a few..
Current shareholder sitting in the red. Have been recasting an eye over Distil (been ignoring them since all the shenanigans around Ardgowan) and would like to ask whether other investors consider this move shrewd?
If I understand correctly, they are receiving 5% interest on a £3m loan which they can convert into a 10% stake in Ardgowan at any time up until 2032. Distil has no debt and seems to have low risk of default - and so, if Ardgowan is a success it would make sense to convert into equity. After 10 years they would have received half the loan back in interest.
https://www.thespiritsbusiness.com/2023/11/ardgowan-begins-work-on-20m-whisky-distillery/
It does appear the distillery continues to move forward with lots of local and governmental support. I am now pivoting to think of Distil not in terms of its brands (I was particularly focused on RedLeg which I feel they could have done more with), but in terms of Ardgowan.
Distil is worth less than the loan it currently carries as an asset.
CV.
1. The loan generates interest rather than revenue.
2. If DIS converts the loan to equity there could be a gain on the investment
3. Going forward the investment is then re valued on yearly basis (doubt there would be a dividend for the foreseeable future).
DIS is not funding anything. DIS investment into Ardgowan is finished.
"Fundraising; Investment in Ardgowan; Notice of GM"
https://www.lse.co.uk/rns/DIS/fundraising-investment-in-ardgowan-notice-of-gm-uurd8x4nf9hcjn1.html
https://www.distil.uk.com/news-page/distilbacksardgowandistillery
4 Jul 2023
Final Results for year ended 31 March 2023
"We took the decision in Q3 not to exercise the option (which expired at the end of December 2022) to invest a further £2m into the Ardgowan Distillery project at this time to focus cash resources on our core business. However, Ardgowan plans remain intact and the project represents a significant long-term investment for the business."
https://www.lse.co.uk/rns/DIS/final-results-for-year-ended-31-march-2023-r7r0nw59hy7voa7.html
"Ardgowan Distillery Company Limited has secured a funding package of equity and debt to support the construction of the distillery project."
https://www.ardgowandistillery.com/for-investors
How is all this going to be funded.
I’m extremely lost with all this investment and not much revenue being generated?
I’ve been heavily invested prior to this low share price.
CV
Important to look at DIS market Cap against its assets.
At the moment share cap is below the value of the loan, so if you're buying you're effectively getting the business chucked in for free plus a couple of hundred grand as well.
Many many years ago we all hoped that Don could sell one of the brands to Diageo for tens of millions. Now Diageo is finding life difficult.
https://www.thisismoney.co.uk/money/markets/article-12735401/Caribbean-sales-slump-rocks-Diageo-Shares-biggest-fall-1987.html
In their results in July, Diageo stated cash and cash equivalents of £1,439m. They started an 'up to' $1 billion share buyback, but with the issues they have, that is likely to either end or be limited to a much lower figure, which means they still have a cash mountain.
With some markets falling back for them, one way to recover some the business would be to acquire more products to sell in the markets that are working well for them.
DIS is valued at a paltry £2.91m but has some great products that Diageo could make huge with it's advertising machine.
If Diageo offered, say £10m for DIS, I can't see many shareholders saying no.
Not saying it's going to happen, but it would not surprise me if I looked at the news at 7am one day and saw it had.
I expect an update in the new year. They usually do..
Whether or not they normally release a Festive trading update.
It does look cheap on the historical chart
Really hard to read where they are from the base accounts.
I'm sure a lots not said due to commercial confidentiality but a view of key supermarket customers / amazon / pub chains / export market as four key routes to market would be welcome - an event in Brighton really isn't of interest or more importantly material.
If they can move up a gear or two and get P&L leverage at higher sales levels the balance sheet looks okay as DaveT notes.
Need to keep working on re-building sales after the 're-model' but I'm encouraged that the NAV is now twice the Market Cap and with an inventory over 1m it looks like we are ready for the lead up to Christmas. I think the new Red bottle should do well especially for 'gifting'.
Good to see an rns showing a plan. I still keep holding as the sp is so low no point in selling and it might be on the turn by the next update....
Was anyone posting on here at the AGM today? Can you offer any feedback on what was presented and discussed in Q&A?
Thanks for that information. I have not seen any Red Leg in MRW here for a while but will check on my next visit. If it is there this week I will ask my mate on the checkout to keep a mental note of how much is moving...
RedLeg available in all supermarkets near me (apart from small Sainsburys).. the through-put in Morrisons seems particularly impressive. Can't understand why Blavod Black Vodka isn't on the UK shelves...
RedLeg seems to have all but disappeared from supermarkets, I haven't seen it in either Tesco, Morrisons or Asda for months.
Dead Man's Fingers seems to be the spiced rum of the moment. Has RedLeg had its day?
Dave, fair point re the visitors centre , however, our blended whisky was due to be launched in Q4 2022 and there is still no sign of it.
It's a crowded market - bell's, teachers, famous grouse, johnnie walker etc. We will need a marketing budget to compete