TIDMSTCK
RNS Number : 1209C
Stock Spirits Group PLC
06 February 2020
Stock Spirits Group PLC
AGM trading statement
FY20 on track
32 consecutive months of volume share growth in Poland
New distribution agreement in Italy with Beam Suntory
6 February 2020
Stock Spirits Group PLC ("Stock Spirits", "Stock" or the
"Company"), a leading producer of branded spirits and liqueurs in
Europe, issues a trading update for the period from 1 October 2019
to 6 February 2020, ahead of its AGM today.
We are on track for the year as a whole. As anticipated, with
effect from 1 January 2020, there was a 10% increase in spirits
excise tax in Poland, and a 13.2% increase in spirits excise tax in
the Czech Republic. As a result, and as expected, our businesses in
both markets experienced exceptionally strong demand from our
customers as they built up inventory in the run up to these changes
being implemented. Overall, the performance in both markets to date
has therefore been significantly ahead of the same period last year
although, based on previous experience of such changes, we expect
the current quarter will see some consequential impact from the
strong first-quarter.
Poland
In Q1(1) the total vodka market recorded an increase in value
(+4.8%) and an increase in volume (+2.3%) versus Q1 last year(2) ,
with growth from both the flavoured and clear vodka segments.
December 2019 was Stock's 32nd consecutive month of volume share
growth, and the 28th consecutive month of value share growth versus
the equivalent month the previous year.(5) This has been achieved
in a pricing environment which remains very competitive. Value
market share at the end of December 2019 (29.7% MAT) was ahead of
the previous year (27.9% MAT)(2) .
Czech Republic
The total spirits market grew in value (+6.4%) and volume
(+4.9%) during Q1.(3)
Stock's market share remained stable, with value market share at
the end of December 2019 (33.8% MAT) broadly flat on the previous
year (34.1% MAT).(3)
Italy
The categories in which Stock operates all declined slightly in
Q1(4) versus Q1 last year. However, Stock grew market share in
brandy, clear vodka and flavoured vodka, maintaining stable value
share (6.8% MAT at the end of December 2019 versus 7.1% MAT at the
end of December 2018). (4)
We are pleased to announce that Stock recently won the tender
for Beam Suntory distribution rights in Italy and expects to
commence distribution in April 2020, subject to the negotiation of
the final agreement. The acquisition of Distillerie Franciacorta
has provided us with enhanced access to key distribution channels
and consumption occasions, and this has been instrumental to
winning the tender for Beam Suntory's world-class premium spirits
portfolio.
Taxation
As previously reported, our Polish subsidiary appealed an
Assessment in respect of its 2013 Corporate Income Tax Return to
the District Administrative Court. The court hearing took place on
28 January 2020 and the court verdict is expected to be published
by the end of February 2020. Based on advice from our taxation and
legal advisors, we continue to consider it likely that our appeals
process will ultimately be successful and our position will be
upheld. In January 2020, the Polish Tax Authority commenced an
audit of our Polish subsidiary's 2014 Corporate Income Tax return,
which is currently in its early stages.
We are monitoring the recently proposed additional tax on small
format pack sizes (less than 300ml) of alcohol in Poland, which is
expected to receive a first reading in the Polish parliament
shortly. At this stage it is too early to identify accurately or
with sufficient certainty the likely impact or any response that we
may make. We are already considering a range of potential
commercial and operational actions that we could take in response
to manage or mitigate the situation, including legal action under
EU law.
Change to Remuneration Committee Chair
John Nicolson steps down today as Chair of the Remuneration
Committee and is replaced by Kate Allum. Mr Nicolson will remain a
member of the Committee. Membership of the other Committees remains
unchanged.
Notice of results
The Company will announce its interim results on Wednesday 13
May 2020.
Sources:
1 First quarter of financial year from 1 October 2019-31
December 2019
2 Nielsen, total Poland, total off trade, total vodka, to end
December 2019
3 Nielsen, total Czech Republic, total off trade, total spirits,
to end December 2019
4 IRI, total Italy, total modern trade, total spirits, to end
December 2019 N.B. Shares for TY and LY include grappa and Stock
Italia's Franciacorta and Julia grappa ranges.
5 Nielsen, total Poland, total off trade, total vodka, % volume
share in relevant month versus same month last year to end December
2019.
6 The signing of agreement for the acquisition of Distillerie
Franciacorta was announced on 31 January 2019
For further information:
Stock Spirits Group:
Paul Bal +44 (0) 1628 648 500
Powerscourt +44 (0) 207 250 1446
Rob Greening stockspirits@powerscourt-group.com
Lisa Kavanagh
Investors can also address any query to
investorqueries@stockspirits.com.
About Stock Spirits Group
Stock Spirits is one of Europe's leading branded spirits and
liqueurs businesses, and offers a portfolio of products that are
rooted in local and regional heritage. With core operations in
Poland, the Czech Republic, Slovakia, Italy, Croatia and Bosnia
& Herzegovina, Stock also exports to more than 50 other
countries worldwide. Global sales volumes currently total over 125
million litres per year.
Stock has production facilities in Poland, the Czech Republic,
Germany and Italy and its core brands include products made to
long-established recipes such as Stock 84 brandy, Fernet Stock
bitters and Limoncè, as well as more recent creations like Stock
Prestige and o dkowa de Luxe vodkas.
Stock is listed on the main market of the London Stock Exchange.
For the year ended 30 September 2019 it delivered total revenue of
EUR312.4 million and operating profit before exceptional items of
EUR53.9 million.
For further information, please visit www.stockspirits.com
END
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