Stock Spirits swings to interim profit, announces Czech acquisition

14th May 2019 12:55

(Sharecast News) - Stock Spirits said on Tuesday that it swung to an interim profit as it announced the acquisition of a premium spirits business in the Czech Republic.In the six months to the end of March 2019, the owner and producer of branded spirits and liqueurs sold mostly in Central and Eastern Europe and Italy swung to an operating profit of €5.8m from a loss of €1.4m in the same period a year ago.Revenue rose 8.2% to €156.9m as volumes of 9 litre cases jumped 6.8% to 7.4m and the company lifted its interim dividend 5.2% to 2.63 cents per share.Stock Spirits said that both its Polish and Czech businesses, which together represent more than 80% of group's sales, delivered good growth in market share, sales and profits.The vodka category in Poland continues to grow in both volume and value - especially the flavoured category and the more premium segments - thanks to increasing consumer affluence.In the Czech Republic, three of the four main spirits categories - rum, vodka and whisky - are in volume and value growth, which the company said has more than compensated for a contraction in herbal bitters.In Italy, which represents around 8% of group revenue and 3% of adjusted EBITDA, the environment remains "challenging", with revenue, profits and margins all lower. Stock Spirits said the total market declined slightly in volume, and value remained flat, with consumption hit by high unemployment and low economic growth.The group also announced the acquisition of Czech Republic spirits business Bartida for an initial consideration of €7.3m and a deferred consideration of up to €3.7m over five years.Chief executive officer Mirek Stachowicz said: "We delivered a strong organic growth performance in our core markets of Poland and the Czech Republic in the period, achieving strong increases in market shares, volume, revenues and profit."Looking to the future, the recently announced acquisitions in Italy and the Czech Republic are a clear sign that we are committed to delivering growth both inorganically and organically. Overall, we believe that the strength of our brands and our strategy means that Stock Spirits is well positioned for further success."At 1255 BST, the shares were down 0.4% at 233p.