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Stock Spirits board pleased with 'year of stabilisation'
Branded spirits and liqueurs producer Stock Spirits Group announced its results for the year ended 31 December on Wednesday, with revenue rising 5.2% to 274.6m, and 3.0% on a constant currency basis.
The London-listed firm, which is focussed primarily on eastern European markets, reported adjusted EBITDA growth of 9.7% to 56.3m, with profit for the year falling to 11.3m from 28.4m.
Its board said that drop in profit followed exceptional charges relating to Italian business impairment of 14.9m and Polish deferred tax of 4.7m.
Basic earnings per share were six euro cents, down from 14 cents in 2016.
On an adjusted basic, earnings per share were ahead 14.3% at 16 euro cents.
Stock Spirits had closing net debt of 53.1m, narrowing from the 59.7m reported at the end of 2016, with leverage less than 1x.
The board proposed a final dividend of 5.72 cents per share, up from 5.45 cents a year ago, which would give a total dividend for 2017 of 8.10 euro cents per share.
On the operational front, Stock Spirits reported an increase in total sales volume of 6.5% to 13.1 million nine-litre cases.
It said its performance in Poland had "stabilised", although the market remained highly competitive, while it completed a 25% investment in Irish whisky producer Quintessential Brands in July.
New distribution agreements were signed with Japanese-American spirits giant Beam-Suntory for the Czech Republic and Slovakia, and with Beluga Group for Croatia and Bosnia.
Additionally, new product launches included the Black Fox premium herbal bitters brand in the Czech Republic, as well as what the board called "flavour developments" for the Saska range in Poland.
A new chief financial officer, Paul Bal, was appointed in November.
"2017 was a year of stabilisation for Stock Spirits, and one in which we embedded the significant changes accomplished in 2016," said chief executive Mirek Stachowicz.
"Turning around the performance in our largest market, Poland, was the group's top priority during the year and, through a combination of strategic investment, realigned pricing and numerous other operational initiatives, we believe that the business has now stabilised.
"As a result, we are delighted to be reporting today that we have delivered growth in volume, revenue, market share, profitability and cash flow across the group during the year."
In addition, Stachowicz said a strategic review undertaken during the year made it clear that there was a greater need to focus on the company's brands in order to keep pace with the changing needs and tastes of end consumers.
"As a result, continuing to premiumise our brands, becoming more relevant to millennials, investing in digital marketing, and carrying out strategic mergers and acquisitions, are all areas of priority.
"This renewed focus, as well as the improvements that we are making across all areas of our operations, mean that we continue to feel well positioned to achieve sustainable long-term growth."