Stock Spirits outperforms markets in Poland and Czechia

Central and eastern Europe-focussed spirits and liqueurs producer Stock Spirits Group updated the market on its full year of operations on Tuesday, reporting that overall trading for the 12 months ended 30 September was in line with its expectations.

The London-listed firm said the Polish and Czech spirits markets, which together delivered around three-quarters of its revenue, continued to show growth both in volume and value terms.

It said its Polish business had continued to perform “well”, despite trading conditions remaining highly competitive, outperforming total vodka growth in both the clear and flavoured sub-categories, and gaining volume and value share.

The board said it was also pleased with the “strong performance” of its Czech business, which outperformed total spirits growth and achieved both volume and value growth.

“The Czech performance was driven by the success of our strategic initiatives including premiumisation, new product development and the addition of the Beam-Suntory distribution brands,” the Stock Spirits board said in its statement.

The company said the acquisition of Distillerie Franciacorta, announced in January, was successfully completed in early June as planned.

“We are on track with integrating it with our existing Italian business. Similarly the acquisition in the Czech Republic of the Bartida businesses, which are focused on the premium on-trade market, was announced and completed in May.”

Group cash flow from operations for the year was described as “strong”, resulting in net debt on 30 September of around €43m after the funding of the two acquisitions.

As it had previously reported, Stock’s Polish subsidiary, Stock Polska, was issued with an assessment by the Polish tax authorities in respect of its 2013 corporate income tax return, which was appealed in January.

The company said the appeal was currently progressing through the process, and based on advice from its taxation advisors, it considered it “likely” that it would ultimately be successful.

Stock Spirits noted that the next hearing was not expected in 2019.

“At our half-year results in May we referred to the possibility of increases in indirect taxation in the Czech Republic, Poland and Italy from 1 January 2020.

“In the Czech Republic, legislation proposing a 13% increase in excise tax on spirits from 1 January 2020 is expected to be ratified later this month.

“We are implementing a range of necessary actions ahead of this change.”

The company said there had been no further indications in relation to any such changes in Poland or Italy.

Stock Spirits said it would announce its results for the year ended 30 September on 4 December.