27th Nov 2015 16:09
LONDON (Alliance News) - Stock Spirits Group PLC on Friday said it has lowered its full-year earnings before interest, tax, depreciation and amortisation guidance after a drop in sales in Poland.
Shares in Stock Spirits were trading down 26% at 128.50 pence on Friday afternoon following the announcement.
The Central Europe-focused drinks distributor had already lowered its 2015 guidance in August to between EUR60 million and EUR68 million when it said it was suffering from aggressive competitor pricing and irregular buying patterns by customers in Poland.
On Friday, it reiterated this situation and said a continuation of the challenging conditions has led it to further reduce its guidance to between EUR50 million and EUR54 billion.
A movement away from traditional trade towards discounters meant that customer orders fell significantly short of expected commitments in November, and Stock Spirits said it is not confident it will make up the shortfall in December.
On top of this, the devaluation of the Polish zloty also will hit results by a further EUR1 million if the exchange rate continues at its current level.
Results from other markets remain in line with expectations, Stock Spirits said.
Stock Spirits added that it has moved to a more flexible financing arrangement which has led to a reduction in margin costs. While the cash benefit of the change will be minimal in the remainder of 2015, it expects to see a significant reduction in financing costs in 2016, although earnings per share will be hit by EUR0.02 this year due to amortisation of the bank fees from the prior facility.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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