Spirits maker Distil (AIM:DIS) plummeted close to 30% after it warned it would need immediate short-term funding after it issued a profit warning.
The London-listed group said unfavourable market conditions combined with inflationary headwinds have “created an immediate short-term funding need within the business”.
Funding options are currently being explored, but shareholders are said to “remain at the heart of all decisions”.
Full-year guidance was cut by the group after it suffered a 55% drop in sales during the four months to July, reaching £204,000, down from £453,000 in 2023.
Management had anticipated lower sales during the start of its financial year but said the results still ended up below expectation.
“In light of this, we have revised our expectations for the full year which, despite the disappointing performance year to date, still anticipate revenue growth versus 2023,” said chairman Don Goulding.
Goulding argued that Distil (AIM:DIS)’s downturn was partly influenced by a weakness in the global market, pointing to industry data by IWSR that showed a decline in worldwide alcohol volumes during 2023 – the first case of this in three decades.
“While this is an issue affecting all global markets, for 2024, this has been exacerbated in the UK by the poor weather, leading to further curbs on socialising both in and out of home,” the group’s chair added.
In a bid to benefit from the industry’s recovery, the company has begun ramping up its promotional activity and the search for on-trade listings, thus causing the need for short-term cash.