6th Feb 2020 12:27
(Alliance News) - Stock Spirits Group PLC on Thursday reported that a motion proposed by Western Gate Private Investments Ltd calling on the alcoholic drinks maker to pay a special dividend, was rejected at its annual general meeting.
Western Gate is the company's largest individual shareholder and proposed that Stock Spirits pay a EUR0.1219 special dividend.
Just shy of 14% of voters backed the motion, requisitioned by Western Gate. Stock Spirits noted that 12% of the votes in favour were represented by Western Gate.
Elsewhere, 21% of shareholders rejected the company's remuneration report and 23% did not approve of its remuneration policy.
Stocks Spirits said: "The group remains committed to ongoing dialogue with our shareholders and, as part of the development of the new remuneration policy, we will reflect on feedback received from shareholders. A further update on these matters will be included in the group's annual report."
All other motions were passed successfully, including one to re-elect Chair David Maloney. The vote was opposed by 15% of Stocks Spirits shareholders.
Western Gate previously had said it would oppose the motion backing his re-election.
John Nicholson, a senior independent director which Western Gate also said it would vote to remove, was re-elected with 87% of the vote.
Western Gate in January had 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."
Shares in Stock Spirits were 1.2% higher at 212.50 pence each in London on Thursday afternoon. The company debuted on the London Main Market in late 2013 at 230p.
Stock Spirits earlier on Thursday said it saw a surge in first-quarter demand in Poland and Czech Republic ahead of an increase in excise tax in the countries.
With effect January 1, excise tax in Poland rose 10% and by 13.2% in the Czech Republic.
Stock Spirits said it experienced increased demand as customers stocked up on products before the tax was imposed.
"Overall, the performance in both markets to date has therefore been significantly ahead of the same period last year although, based on previous experience of such changes, we expect the current quarter will see some consequential impact from the strong first-quarter," the company said ahead of its annual general meeting on Thursday.
Also in Poland, an additional tax on small format - less than 300 millilitres - alcoholic products has been proposed.
The proposal will get a first reading in Polish parliament shortly.
Stock Spirits explained: "At this stage it is too early to identify accurately or with sufficient certainty the likely impact or any response that we may make. We are already considering a range of potential commercial and operational actions that we could take in response to manage or mitigate the situation, including legal action under European Union law."
In the three months to December 31, the total vodka market in Poland grew in value by 2.3% year-on-year.
During December, Stocks Spirits posted its 32nd successive month of volume share growth in Poland, despite reporting a "competitive" pricing environment.
In the Czech Republic, the spirits market grew in value by 6.4% during the first quarter.
Stock Spirits also added that it expects to win an appeal in Poland, in relation to a 2013 income tax return.
A court hearing on the matter took place on January 28, and Stock Spirits expects a verdict before the end of February.
"Based on advice from our taxation and legal advisors, we continue to consider it likely that our appeals process will ultimately be successful and our position will be upheld," Stock Spirits said.
The Polish Tax Authority also began an audit of a Stock Spirits subsidiary's 2014 tax returns in January. The company noted the audit is in its early stages.
By Eric Cunha; [email protected]
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