Sector movers: Stock Spirits, Diageo and SABMiller boost beverage stocks

12th Mar 2015 15:07

Investors were holding up a glass to Stock Spirits on Thursday after annual results impressed, while upbeat broker comments boosted Diageo and SABMiller, giving the UK beverages sector a lift in afternoon trade.Stock Spirits shares were up 8.4% at 206.75p after the Central and Eastern European branded spirits producer said it expects a return to "more normal trading patterns" in Poland this year after a difficult 2014, following a 15% increase in excise duty and supply chain disruptions.The group reported adjusted earnings before interest, tax, depreciation and amortisation of €66.4m for last year, down from €83.7m in 2013 and broadly in line with recently-downgraded guidance.Chief executive Chris Heath said he was "very encouraged" by trends in Poland so far this year, with consumers having "accepted" duty-driven price increases.Analysts at Numis Securities maintained a 'buy' recommendation on the stock, saying its positive stance is "predicated on the view that the Polish spirits market will stabilise in 2015 and management seems confident that this will happen".Diageo, meanwhile, was rising 2.3% after Morgan Stanley initiated coverage on the stock with an 'overweight' rating, saying that its valuation was attractive relative to peers.The US bank said: "Diageo has astrong exposure to the US consumer and astrong opportunity in India, while destocking and FX volatility issues are easing."SABMiller was up 2.6% after Exane BNP Paribas analysts said "it's now or never for a bid" for the company from Dutch brewing giant Anheuser-Busch InBev.The broker, which started coverage of SABMiller with an 'outperform' recommendation, said: "Now is arguably the best time for ABI to finance a bid on SAB, courtesy of bond and FX markets. Despite limited synergies and execution risk, a deal would boost [earnings] and more importantly, help solve ABI's volume issue. Tempting."If a deal doesn't happen soon, it may never happen," it said.Exane also said that SABMiller is keen to spend, and wine, beer and softs drinks group Castel "is their best and last large option".Others in the sector such as Coca-Cola HBC, C&C, Britvic and AG Barr were also in demand in London. Top performing sectors so far todayConstruction & Materials 4,750.23 +2.35%Beverages 14,812.04 +2.33%Pharmaceuticals & Biotechnology 13,740.17 +2.27%Industrial Metals & Mining 1,855.50 +1.95%Health Care Equipment & Services 6,634.10 +1.30%Bottom performing sectors so far todayIndustrial Transportation 2,791.09 -0.91%Technology Hardware & Equipment 1,369.93 -0.47%Aerospace and Defence 5,227.60 -0.18%Banks 4,264.36 -0.15%General Industrials 4,401.82 -0.09%