Just On Call - Polish headache awaits, but Stock Spirits upbeat on years ahead
One-off costs hit Stock Spirits' bottom line in 2013
Stock Spirits has said it expects its performance in Poland to struggle in the first part of 2014, although the longer-term prognosis in the country remains strong.
Earlier today (27 March), the UK-based company, which operates mainly in Czech and Poland, released its first set of full-year results, having launched an IPO in October. Stock highlighted in its results release that the January introduction of a 15% excise duty increase on strong alcohol in Poland will pose a challenge.
Stock owns Czysta de Luxe, the leading brand in Poland's vodka market.
Speaking to just-drinks after the release of the results, CFO Lesley Jackson conceded that spirits consumption in the country will likely slip in the coming months. “We would expect to see some decline in consumption this year, exaggerated in the first part of the year,” Jackson said. “But, it's too early to take a call on this.
“In normal circumstances, you would expect this in the period following a duty increase. Then, over the course of six, 12 or 18 months, the whole thing starts to stabilise and you move back to normal market trends.
Jackson noted that a pre-duty buy-in in the country had contributed around EUR5m (US$6.9m) to Stock's EBITDA in 2013.
Stock also reported a marked fall in profits in 2013, due to exceptional items and one-off costs. As well as fees related to the IPO last year, Stock's bottom line in 2012 was boosted by the sale of its US business.
“We've had the worst of both worlds (in 2013),” said Jackson. “In 2012, we had a level of income that did not recur in 2013, and we had significant one-off costs in 2013.”
Jackson noted, however, that the company is upbeat about the future. “Since the IPO, life has changed,” she said. “For us now, it's about re-evaluating ourselves as a business with an independent future. We're pretty excited by that.
“We've got a renewed energy towards the business: We are masters of our own destiny completely.”
The company will issue a Q1 interim management statement on 13 May.
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