27th Mar 2014 12:28
LONDON (Alliance News) - Central and Eastern Europe spirits producer Stock Spirits Group PLC Thursday reported a 16% increase in revenue in 2013, but a huge drop in profit, hit by costs associated with its recent stock-market flotation, Polish duty increases, and the absence of a one-off gain which boosted its profits the previous year.
The recently listed company, which owns brands including Stock 84 brandy, Wodka Zoladkowa and Fernet Stock bitter, said it has started 2014 well despite the challenges posed by a Polish excise duty increase.
"The group is well placed to capitalise on the opportunities available in the central and eastern European region. We view the future with confidence," said Chief Executive Officer Chris Heath in a statement.
Stock Spirits said total revenues rose 16% to EUR340.5 million in 2013, up from EUR292.4 million the prior year, boosted by a 11% increase in total volumes to 17.4 million nine litre cases.
However, the spirits producer reported a pretax profit of only EUR8.9 million for the year, significantly lower than the EUR26.3 million pretax profit it reported in 2012.
It said that this was caused by an increase in selling and operating expenses, an extensive capital restructuring exercise prior to its initial public offering, and other non-recurring costs. Additionally the year earlier benefited from a net gain from the disposal of its US business.
At the end of the year, the group had net debt of EUR46.3 million, an increase of EUR15.1 million on the prior year.
The group said it made several significant new product launches, including new flavours of Lubelska, Stock Prestige and Bozkov.
It said it also completed its 'Project Polar' initiative in Poland to install 20,000 branded refrigerators in traditional off-trade retail stores across the country. It said it made a "one-off" EUR11.9 million investment for the roll-out.
"We have also taken a significant step forward towards our goal of broadening our premium product offering through the exclusive distribution agreements with Beam in Poland and Diageo PLC in the Czech Republic," it said.
Shares in Stock Spirits were trading 0.4% higher Thursday morning at 283.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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