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Stock Spirits recovers in Poland

The spirits company has achieved its "top priority" for the year – recovering its business in Poland
March 8, 2018

Improving the trading performance in Poland was the top priority for Stock Spirits (STCK) in 2017, and progress is evident. Sales improved by 8 per cent to €148m (£132m) over the year, with adjusted cash profit up 5 per cent to €37.7m. The region now represents more than half of group revenue. Chief executive Mirek Stachowicz said the group had initially cut prices to get them on a par with competitors, before promoting premium ranges to encourage return customers. Roughly €3.2m-worth of costs have been saved ahead of schedule, too. 

IC TIP: Hold at 281p

Mr Stachowicz said the recovery in Poland had reignited investors' interest in the future of the business. As such, the company is now on the hunt for acquisitions that could help deliver additional cost synergies or open up new geographies. It’s also hoping to attract more millennial customers with its new Black Fox liquor; Mr Stachowicz said many of the current brands tend to be favoured by older generations.

Analysts at Numis expect pre-tax profit of €44.4m in 2018, giving EPS of 16.5¢, moving to €45.4m and 16.8¢ in 2019. 

STOCK SPIRITS (STCK)  
ORD PRICE:281pMARKET VALUE:£561m
TOUCH:280-281p12-MONTH HIGH:320pLOW: 156p
DIVIDEND YIELD:2.6%PE RATIO:52
NET ASSET VALUE:177¢*NET DEBT:15%
Year to 31 DecTurnover (€m)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
2013341-8.75.0nil
201429349.018.03.80
201526331.510.04.55
201626139.214.07.72
201727527.36.08.10
% change+5-30-57+5
Ex-div:3 May   
Payment:25 May   
*Includes intangible assets of €358m, or 179¢ a share                              £1=€1.12