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Stock Spirits H1 sales hit by Polish duty hikes

Published:  28 August, 2014

Stock Spirits saw revenues fall by 10% to €137.7 million as a 15% hike in Polish excise duty hit consumption levels in the six months to June 30.

The spirits firm, which is headquartered in the UK but whose core operations are focused on Central and Eastern Europe, saw operating profit before exceptional costs slide 23% to €23.2 million during its first half. The group said this includes the impact of the Polish duty increase of €5m, foreign exchange movements, incremental costs of being a listed company and the introduction of incentive plans for management.

Stock SpiritsStock Spirits' revenues were hit by Polish duty hikesThe Buckinghamshire-based Stock Spirits said operating profit before exceptional costs fell 23% to €23.2 million euros for the six months to June 30.

Stock Spirits profit after tax grew from a loss of €10.7 million in 2013  to €16.8 million "reflecting a reduction in exceptional and finance costs as a result of the capital restructuring at the time of the IPO".

Chris Heath, chief executive of Stock Spirits Group, said: "The group's results for the first half of the year 2014 are in line with our internal targets and we are on track to meet our expectations for the full year. This solid performance has been delivered despite the challenge posed by the January 2014 excise duty increase in our largest market, Poland."

The group has distribution agreements with Beam Suntory in place in Poland and has just extended that agreement to Croatia. It also works with Diageo in the Czech Republic, meaning it is now working "in partnership with global spirits leaders in three of our six core markets".

The management's long-term goals are to expand the product portfolio in existing markets, continue to invest in emerging markets with strong growth potential, use its purchasing and production capabilities to deliver quality products with a competitive cost advantage and pursue acquisition opportunities across Central and Eastern Europe.

Its main markets are Poland, the Czech Republic, Slovakia, Italy, Croatia and Bosnia & Herzegovina, but it also exports to more than 40 other countries worldwide. Global sales volumes currently total approximately 150 million litres per year.

The company, which was formed through the merger of Eckes & Stock and Polmos Lublin in 2008, floated on the main market of the London Stock Exchange in October 2013.