5th Apr 2016 07:10
LONDON (Alliance News) - Western Gate Private Investments Ltd said Tuesday it has requested the removal of Chris Heath, the chief executive of Stock Spirits Group PLC, as a director of the company and asked the company to start a search for a replacement.
Western Gate is the largest individual shareholder in Stock Spirits, holding a 9.7% stake. It also nominated two new independent non-executive directors to stand for election to the board of Stock Spirits at its annual general meeting on May 17.
Western Gate said it held a series of meetings and exchanges with Stock Spirits' executive and non-executive directors, none of which addressed the concerns it has with the business.
It said its first concern a decline in Stock Spirits market share in Poland from 38.4% at the company's IPO in October 2013 to 26.3% in December, accompanied by a 34% decline in Polish revenue between financial years 2013 and 2015.
Second, Western Gate cited an "underperforming share price" which has more than halved from a peak of 315 pence and was 37% below the listing price of 235p on April 1.
Third, Western Gate raised concerns over corporate costs which it said have more than doubled since 2011, while revenue has declined 11% over the same period.
The shareholder also said Stock Spirits' executive management have "continued to be very well rewarded notwithstanding poor underlying business performance", and finally highlighted the loss of five regional managers since the company's IPO, noting that no dedicated Polish CEO has been in place since January 2015.
Western Gate has nominated Alberto Da Ponte and Randy Pankevicz as independent non-executive directors. Da Ponte has worked in the drinks industry for 25 years, including roles at Heineken Group, Unilever PLC and Cadbury Schweppes.
Pankevicz has been in the drinks industry for 25 years, primarily at PepsiCo International.
Western Gate said it believes the executive management team has run out of ideas about how to stem the ongoing market share losses affecting the Polish business and the board would benefit from "added relevant experience, a fresh perspective and renewed energy".
"Financial performance has been poor, market share has been lost in its core Polish market, salaries and costs are too high and remote control management of the business from the UK, where the company has no major revenue generating operations, is clearly not working. The executive team consistently blames others instead of being on the ground in Poland addressing the local market dynamics and managing the business. A fresh perspective on the board will benefit all stakeholders," Western Gate's Luis Amaral said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
STCK.L