Distil (AIM:DIS), the AIM-listed premium spirits group, saw its shares fall 52% to 0.044 pence on Tuesday after warning that full-year revenues would miss market expectations by a material margin and that the business faces an immediate short-term funding need.
The company, whose brands include RedLeg Spiced Rum, Blackwoods Gin and Vodka, and Blavod Black Vodka, said sales in the final quarter of its financial year ending 31 March were significantly below forecast.
This compounded a softer performance throughout the year and left the board exploring funding options.
The shortfall stemmed from higher than expected levels of stock sitting unsold in the distribution network globally, which reduced orders from trade partners even as consumer sales of its products increased.
In the UK, sales out from its distributor to customers rose 51% year on year in the first two months of 2026, and RedLeg grew its share in grocery, but not at the rates the company had forecast.
Distil said the broader spirits market had been hit by a combination of economic pressure on consumers and successive duty increases since August 2023, with the most recent rise, which came into force on 1 February, adding a minimum of 50p per bottle to the retail price of its core products.
The planned US launch of Blavod has also been delayed after an administrative setback related to the Craft Beverage Modernization Act, a US scheme that allows foreign producers to reduce excise costs for American importers, with the company's distributor expecting the issue to be resolved in the first quarter of the next financial year.
Distil, whose major shareholder is former ITM Power boss, Dr Graham Cooley, who owns a 23% stake, said it was reviewing its distributor relationships and route-to-market arrangements, with negotiations under way and an update promised shortly.
The company also disclosed that Ardgowan Distillery, an associated business in which Distil has an interest, faces its own funding gap after power supply problems disrupted production and delayed the drawdown of debt financing, which is tied to the volume of spirit produced.