27th Jan 2020 11:39
(Alliance News) - Stock Spirits Group PLC's largest individual shareholder on Monday said it will vote to oust the alcoholic drinks maker's chair.
Western Gate Private Investments Ltd, which holds a 10% stake in Stock Spirits, said it will oppose a motion backing the re-election of David Maloney at the annual general meeting on February 6.
Western Gate will also vote to remove John Nicholson, a Stock Spirits senior independent director.
The shareholder said: "Western Gate believes that the current culture of running the company for the benefit of the board rather than for shareholders comes from the top. These two roles are occupied by directors who exhibit an entrenched belief in this culture and who have been on the board since IPO.
"It is also our belief that responsibility for the mergers & acquisition strategy rests at board level and we are yet to see a credible mergers & acquisition strategy which has been either communicated or delivered by the company. Acquisition expenditure is yet to positively impact underlying earnings or cash flow. Indeed, management guidance is that no material effect should be expected until 2023. Western Gate believes that a new approach at the top is vital."
Western Gate will back re-electing Stocks Spirits Chief Executive Miroslaw Stachowicz and Chief Financial Officer Paul Bal. The duo have have helped drive a "significant improvement in the operational performance of the business", Western Gate explained.
Elsewhere, the investor will abstain from voting in motions concerning the re-election of other board members.
Western Gate again recommended that shareholders vote to approve a EUR0.1219 special dividend per Stock Spirits share. The board of Stock Spirits earlier in January recommended that shareholders do not approve the special dividend.
"Western Gate is intent that shareholders are adequately rewarded for their support of the company," Western Gate said.
"The company offers one of the lowest cash returns to shareholders amongst its peers, while it continues to increase director remuneration year on year," the investor added.
Western Gate Director Francisco Santos said: "For too long Stock Spirits has not been run for the owners of the company, the shareholders. We will be voting against resolutions which we feel demonstrate poor governance and demonstrate poor culture which starts at the top."
Monday's statement by Western Gate is the latest in a series of tit-for-tats between the shareholder and investee.
Earlier in January, Portuguese investor Luis Amaral, who owns Western Gate, lammed the board of Stock Spirits, demanding the firm pay a special dividend. He also criticised the company's M&A record.
In response, Stock Spirits said: "We have a strategy of both organic and M&A-driven growth which, as our recent full year results show, is driving a strong financial performance and is enabling us to pay consistently increasing dividends in line with our stated dividend policy."
Stock Spirits shares were 3.7% lower at 208.00 pence each in London on Monday morning.
By Eric Cunha; [email protected]
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