Distil PLC interim results: margin gains, tighter costs and a Q2 rebound
Distil PLC, the owner of RedLeg Spiced Rum, Blackwoods Gin and Vodka, TRØVE Botanical Vodka and Blavod Black Vodka, has posted its unaudited results for the six months to 30 September 2025. It is a mixed set: revenue is down year on year, but gross margins and cost discipline improved, the loss narrowed, and Q2 showed clear momentum after a tough Q1.
The backdrop has been rough. The company highlights spirits inflation at 5% versus UK CPI at 3.6%, and volume declines across both off-trade and on-trade. Against that, Distil has leaned into cost control, channel partnerships and focused brand activity.
Key numbers investors should know
| Metric | H1 FY2026 (6 months to 30 Sep 2025) | H1 FY2025 (6 months to 30 Sep 2024) | Comment |
|---|---|---|---|
| Revenue | £313k | £393k | Down 20% |
| Gross profit | £135k | £158k | Down 15% |
| Gross margin | 43% | 40% | Margin improvement |
| Advertising and promotional costs | £216k | £239k | Down 10% |
| Other administrative expenses | £506k | £541k | Down 6% |
| Loss before tax | £(510)k | £(555)k | Reduced by £45k |
| Cash at period end | £262k | £314k | Second tranche of the fundraise received in H2 (not in this cash figure) |
Q2 performance shows traction after a Q1 stock hangover
Q1 was hit by a stock phasing issue as the new UK distributor, Global Brands Ltd, built inventory in the prior year. That cleared in Q2, where revenues increased 269% on Q1.
| Q2 (Jun-Sep) metric | 2025 | 2024 | Comment |
|---|---|---|---|
| Revenue | £246k | £245k | Flat year on year |
| Gross profit | £123k | £104k | Up 18% |
| Gross margin | 50% | 42% | Sharp improvement |
| Brand marketing investment | £135k | £127k | Up 6% |
| Administrative costs | £272k | £297k | Down 8% (staff costs -15%) |
My take: the Q2 margin at 50% versus 42% last year is the standout. It signals the cost work and pricing discipline are biting, and that the Global Brands transition is settling down.
Commercial progress: more distribution, US relaunch, DTC growth
- Over 200 new UK on-trade distribution points via Global Brands Ltd. More taps and listings matter for rate of sale into Christmas.
- New partnership with AIKO Importers Inc to relaunch Blavod Black Vodka in the US. Shipments are expected in H2, delayed by TTB approvals and the US government shutdown.
- RedLeg direct-to-consumer website sales up 191% year on year, helped by stronger marketing capabilities.
- Ardgowan Open Day drove +63% revenues year on year for Blackwoods, with the Blackwoods Brand Home nearing completion and operating under temporary licences while a full premises licence is processed.
This is the right mix for a small portfolio owner: build distribution, leverage digital for DTC, and add experiential assets to support brand equity and cash generation.
Costs, margins and operations: what changed
The company has prioritised cost control across production, warehousing and logistics. Freight and storage savings have come from tighter inventory and better coordination between bottling and distribution. Despite inflation for glass, packaging and logistics, Q2 gross margin rose to 50% and H1 margin to 43%.
Administrative costs fell 6% in the half, with staff and related costs down 12%. Advertising and promotional spend was trimmed 10% in H1 but increased in Q2 to support trading – a sensible pivot into the peak season.
Balance sheet, cash and funding runway
Net assets stand at £5.5 million. Non-current financial assets of £3.0 million reflect the 2021 convertible loan note (CLN) in Ardgowan whisky distillery. Following a June variation, the CLN carries a 6.5% annual coupon and would convert into 10.5% equity ownership of the facility.
Cash was £262k at period end, not including the second tranche of the September equity raise (£377k gross) that landed in H2. The company raised £0.755 million gross in September 2025 to support working capital and brand development, with the first tranche of £378k gross received on 18 September. It also utilised £299k of invoice financing in the half. Net cash used in operations was £799k, so continued discipline around working capital and trading performance remains crucial.
Inventory and receivables
- Inventories: £924k, down from £1,252k a year ago and down from £1,039k at 31 March 2025.
- Trade and other receivables: £308k versus £233k a year ago.
- Current liabilities: £639k, including £195k financial liabilities and £400k trade and other payables.
Overall leverage is modest, but the business is still loss-making and cash consumptive. The fundraise and the Q2 pickup help, yet holiday trading will need to do the heavy lifting.
Ardgowan and the Blackwoods Brand Home: strategic optionality
The Ardgowan distillery reached first whisky distillation in June. For Distil, the CLN yields finance income (£87k in H1) and provides a potential 10.5% equity stake on conversion. The near-term commercial prize is the Blackwoods Brand Home, which is in final fit-out. Once open, it should deliver tours, tastings and branded retail – useful incremental revenue and a platform to host trade customers.
Outlook: what to watch in H2 2025
- Christmas trading – the company plans increased promotional support and on-trade activation with Global Brands.
- US relaunch of Blavod Black Vodka – shipments expected in H2 as TTB and shutdown delays unwind.
- Opening of the Blackwoods Brand Home – potential to lift brand visibility and add a new revenue stream.
- Margins – can the Q2 50% gross margin be held as volumes scale and promotions increase?
- Cash management – monitor operating cash burn versus proceeds from the equity raise and invoice financing.
- Policy risk – Autumn Budget duty outcome. The company is hopeful no further duty increases are imposed.
My view: steadying the ship, but execution now counts
This reads like a stabilisation half. H1 revenue fell and the company still lost money, but the loss narrowed, margins improved, costs were trimmed, and Q2 was materially better than Q1. Distribution wins, a US partner for Blavod, and strong RedLeg DTC growth are all encouraging.
The near-term bull case is simple: a solid Christmas, US shipments arriving, and the Blackwoods Brand Home opening – all while keeping that improved margin profile. The bear case is also clear: category headwinds persist, promotions bite into margin, and cash burn stays elevated.
For now, I’d mark this as cautiously positive. The numbers show discipline, the pipeline has catalysts, and the balance sheet has been topped up. As ever with smaller drinks groups, it will come down to velocity on shelf, the effectiveness of spend, and tight cash control through H2. If you want the full interim report, the company says copies will be available at www.distil.uk.com.
