14th May 2019 10:16
LONDON (Alliance News) - Stock Spirits Group PLC on Tuesday reported a sharp rise profit in the first half of its financial year as the central and eastern European booze retailer saw its sales volumes rise.
Stock Spirits also announced it is acquiring Czech Republic spirits business Bartida for EUR7.3 million, with an additional deferred consideration of up to EUR3.7 million over five years.
In the six months to March 31, the branded spirits and liqueurs exporter reported a 30% rise in pretax profit to EUR12.6 million from EUR9.7 million the year before.
The company's revenue increased 8.1% to EUR156.9 million from EUR145.1 million the year before.
Stock Spirits reported an interim dividend of 2.63 euro cents per share, a 5.2% increase on the 2.50 cents distributed in the corresponding period last year.
The company's volumes of 9 litre cases sold increased 7.2% in the first half to 7.4 million from 6.9 million the year before. Stock Spirits noted the rise was achieved despite the Easter holiday break not falling in the first half of the year as it had the year before.
Selling expenses increased by 2.9% in the period to EUR28.9 million due to increased promotional expenditure.
"We delivered a strong organic growth performance in our core markets of Poland and the Czech Republic in the period, achieving strong increases in market shares, volume, revenues and profit. Looking to the future, the recently announced acquisitions in Italy and the Czech Republic are a clear sign that we are committed to delivering growth both inorganically and organically. Overall, we believe that the strength of our brands and our strategy means that Stock Spirits is well positioned for further success," said Chief Executive Mirek Stachowicz.
In January, Stock Spirits acquired Distillerie Franciacorta SpA, an Italian producer of grappa, limoncello and sparkling wine for EUR23.5 million, plus EUR3.0 million for the acquisition of the land around it, in the Lombardy region of Italy.
Stock Spirits said its Polish and Czech businesses - which together represents over 80% of the company's sales - delivered "good" growth in market share, sales and profit. The company remains "pleased" with its ongoing performance in the two countries.
"Cash generation continues to be high, meaning that the group's financial position remains strong, even after allowing for an increased interim dividend and payment for the two acquisitions. The momentum that we are seeing is largely organically-driven, supported by the continued positive economic back-drops in a number of our central European markets," the company said.
Despite the two recent acquisitions, Stock Spirits said its will continue to assess acquisition opportunities, but if no "significant" merger happens the company will consider additional shareholder distributions.
Shares in Stock Spirits were down 1.5% Tuesday at 230.50 pence each.
Related Shares:
STCK.L