Sin taxes took the wind out of Distell’s profits in financial 2018 as the liquor group behind big-name brands such as Savanna cider, Nederburg wine and Amarula liqueur battled with another hefty hike in excise duty. Excise as a percentage of sales was 26.4% in the year to June 2018, a staggering increase from the 16.8% Distell had to pay in 2001. The higher excise charge and one-off exceptional costs at an associate company in Tanzania were the major factors behind a 5.6% drop in earnings to 667.5c a share from 707.3c.

Distell, which was relisted at the end of May at R130, reported a strong 10.4% increase in sales with volume growth in all three reporting regions — SA, Africa and international. Revenue grew 10.4% to R24bn and operating profit edged up 1.8% to R2.4bn.

The share price closed 1.47% weaker on Friday at R121.90. In Africa, where the group boosted its exposure through investment in Best Global Brands, exceptional performances were recorded in Botswana, Kenya, Zambia and Zimbabwe.

In SA volumes were up 4.4% and revenue advanced 9.9%.

Chris Logan of Opportune Investments said the results were "commendable in what were very challenging conditions". Not only was the consumer hit by low economic growth, the market had become considerably more competitive as rival KWV was posing a greater threat under new owners, Logan said.

In addition, ABInbev, which acquired control of SABMiller in 2016, had become a more aggressive competitor in the cider market, Logan said. "On top of all that the government is milking them on excise."

Group MD Richard Rushton said he was "very pleased with the performance" given the challenging conditions. Management would have to work with the government on the excise issue, which is "putting pressure on us and the consumer", Rushton said.