Distil PLC (LON:DIS) have signed a joint venture agreement with British Honey Co Ltd.
The drinks manufacturer said that the deal will allow the production and marketing of a new range of botanical spirits.
Both companies have agreed to contribute an initial £30,000 towards production and marketing of the new product range.
An intellectual property rights clause in newly create brands and recipes will mean that these new products are jointly owned and that future revenues will be split evenly.
Distil will have access to to British Honey’s distillery for production, and notably, the gin and vodka producing firm have pledge to assist British Honey with the marketing and distribution of their own brands.
The new venture will start immediately, and Distil are expecting to incur additional costs in its current financial year.
The firm have already told shareholders that profit for the year ending March 31 will fall below expectations, but should show a year on year rise.
Don Goulding, Executive Chairman, Distil Plc commented:
“I am very pleased to partner with BHC to facilitate an accelerated innovation agenda and more nimble product development capability. The joint venture will facilitate the creation and marketing of exciting new products and will improve Distil’s capability to develop and refresh its own brand portfolio. This new collaboration brings together complementary capabilities which will benefit both companies and we look forward to communicating our progress in the coming months.”
Distil’s strong festive trading
In January, Distil noted that they had reported a strong set of fundamentals across the Christmas period.
The gin and vodka producer told shareholders that it had seen a good sales performance for the festive period, which was one aspect of the impressive update.
Distil said that revenue for the third quarter, which ended on December 31 increased by 7% year on year which was supported by continued marketing investment.
The firm did says that they saw a 13% drop in revenue despite maintaining its marketing investment spend.
Shares in Distil trade at 0.85p (+3.03%). 19/2/20 11:31BST.