East Imperial (EISB ), a producer of ultra-premium beverages, announced this morning unaudited results for the 6 months ended 30 June 2022 (H1 2022).
Financial performance
East Imperial reported 26.3% higher revenues to £1.28m from £1.02 in H1 2021 as key markets returned and trading normalised in the US and Europe. In the company's key US market, sales were up 132% year-on-year. The APAC market also showed strong signs of post-Covid recovery, East Imperial said.
Net cash improved substantially to £1.5m from £0.2m in H1 2021, helped by January's £3.4m capital raise. Q2 2022 saw significant lowering of cash requirements compared to Q1 2022.
Margins recovered in Q2 2022, currently at 17.4% YTD as East Imperial continued to implement its margin improvement programme.
Strategic Highlights
In the US, East Imperial entered into a distribution agreement with Republic National Distributing Company (RNDC) and its products have now been successfully introduced in 12 states. East Imperial is in advanced talks to appoint a bottling partner in the US, which would significantly reduce capital costs as the rollout progresses.
In China, East Imperial signed a distribution agreement with Wen Hua Hang Wine Spirits Company, one of the largest distributors in the country, to supply its entire product range across the Chinese mainland and Macau.
Answering demand for lower sugar options, East Imperial introduced Light Tonic in Q2 2022.
Anthony Burt, CEO, commented:
"I'm very pleased to be reporting double digit revenue growth for the half, as well as a significantly improved net cash position. Our revenue growth was driven by a very strong performance in the US and Europe as these markets return to normal trading patterns. While the impact of Covid has lasted longer in APAC, we are starting to see signs of recovery in our business there and we expect to see the return to growth in the second half."
View from Vox
Overall, a strong showing from East Imperial in H1 2022 with double digit revenue growth and a much improved cash position following January's £3.4m capital raise. Aggressive expansion across the US and APAC did result in a wider operating loss. However, as markets return to normal trading patterns and global demand for premium beverages increases, those investments should convert to revenue in the near term.
Today's report further testifies to the effectiveness of East Imperial's US strategy. Sales grew 132% as partner RNDC rolled out East Imperial's product range across 12 states, with margin improvement expected after the company appoints a US-based bottler. East Imperial's focus on the luxury segment captures the growing trend of "premiumisation" in the beverage industry, and partially offsets the effect of inflation on consumers' purchasing power.
Today's results echo July's trading update when East Imperial reported a 32% increase in revenues YoY as restrictions continued to lift in key markets. The company reported June as its strongest month to date for sales.
Looking ahead, prospects for East Imperial remain strong with on-premise and off-premise business steadily growing and even better trading expected in the traditionally stronger H2.
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