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Stock Spirits Group PLC ("the Company"), a leading owner and producer of premium branded spirits and liqueurs that are principally sold in Central and Eastern Europe and Italy, today provides a pre-close trading update for the year ended 30 September 2019.
Overall trading for the year ended 30 September 2019 was in line with our expectations.
The Polish and Czech spirits markets, which together deliver approximately three-quarters of our revenue, continued to show growth in both volume and value terms (source: Nielsen MAT August 2019).
Our Polish business has continued to perform well despite trading conditions remaining highly competitive, outperforming total vodka growth in both the clear and flavoured sub-categories, and gaining volume and value share. We are also pleased with the strong performance of our Czech business, which outperformed total spirits growth and achieved both volume and value growth. The Czech performance was driven by the success of our strategic initiatives including premiumisation, new product development and the addition of the Beam-Suntory distribution brands.
The acquisition of Distillerie Franciacorta, announced in January, was successfully completed in early June as planned. We are on track with integrating it with our existing Italian business. Similarly the acquisition in the Czech Republic of the Bartida businesses, which are focused on the premium on-trade market, was announced and completed in May.
Group cash flow from operations for the year was strong, resulting in net debt at 30 September 2019 of circa €43m after the funding of the two acquisitions referenced above (30 September 2018: €32m).
As previously reported, our Polish subsidiary, Stock Polska, was issued with an assessment by the Polish tax authorities in respect of its 2013 Corporate Income Tax Return, which was appealed in January. The appeal is currently progressing through the appeals procedure and, based on advice from our taxation advisors, we consider it likely that it will ultimately be successful. The next hearing is not expected in 2019.
At our half-year results in May we referred to the possibility of increases in indirect taxation in the Czech Republic, Poland and Italy from 1 January 2020. In the Czech Republic, legislation proposing a 13% increase in excise tax on spirits from 1 January 2020 is expected to be ratified later this month. We are implementing a range of necessary actions ahead of this change. There have been no further indications in relation to any such changes in Poland or Italy.
We will announce our results for the year ended 30 September 2019 on Wednesday 4 December 2019.
For further information
Stock Spirits Group PLC:
Paul Bal, Chief Financial Officer
+44 (0) 1628 648 500
+44 (0) 20 7250 1446
A copy of this announcement has been posted on www.stockspirits.com. Investors can also address any queries to firstname.lastname@example.org.
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