A stiff drink was needed last year if your tipple of choice was Stock Spirits (STCK). A profit warning in November forced the shares down more than two-fifths in a week after pricing troubles in Poland. Now only 53 per cent of Stock Spirits' sales come from the country, compared with 60 per cent in 2014. A review of operations there has already finished, identifying a dozen "responsive actions" to the malaise, but it could still be a long road to recovery.
The wholesaler has been hurt by the rise of the discount retailers in Poland, to which it had always undersold in terms of volume to protect margins, while its competitors priced aggressively. Stock Spirits is now being forced to engage more with discounters, and to reduce, in chief financial officer Lesley Jackson's words, the "too big a gap" between its prices and those of rival suppliers. At least discounter businesses have matured and their prices have risen, Ms Jackson says.
The finance chief also acknowledged the business had "struggled to complete any acquisitions". It will now look further afield and eye larger targets that could help "move the dial".
Analysts at Berenberg expect adjusted pre-tax profit of €30.8m in 2016, leading to adjusted EPS of 11.3¢, down from €32.5m and 13.1¢ last year.
| STOCK SPIRITS (STCK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 142p | MARKET VALUE: | £284m | |
| TOUCH: | 142p-143p | 12-MONTH HIGH: | 231p | LOW: 98p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 1818 | |
| NET ASSET VALUE: | 182¢* | NET DEBT: | 16% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011** | 295 | 21.5 | na | nil |
| 2012** | 292 | 29.0 | 0.2 | nil |
| 2013 | 341 | -8.7 | 5.0 | nil |
| 2014 | 293 | 49.0 | 0.2 | 3.8 |
| 2015 | 263 | 31.5 | 0.1 | 5.8 |
| % change | -10 | -36 | -44 | +55 |
Ex-div: 5 May Payment: 27 May *Includes intangible assets of €359m, or 180¢ a share **Pre-IPO figures £1=€1.28 | ||||
