Stock Spirits should have been toasting just over a year as a public company, but a profit warning has left a nasty taste for investors.
The company, the biggest vodka maker in Poland and the Czech Republic whose brands include Czysta de Luxe, warned full year profits could be up to €10m lower than expected unless trading picked up.
It said it had been hurt by higher Polish excise duties and aggessive pricing by competitors during the third quarter, and this was continuing into the final three months of the year. It said:
[In Poland] consumers appear to have largely accepted the price rises and volume trends have continued at the same level we saw in the first half of the year, ie a decline of approximately 3.6% year to date to the end of August which we believe has continued during the rest of the quarter.
However we have experienced very aggressive competitor pricing and promotional activity to secure distribution into the trade customers. This has resulted in considerable pressure on margins and....we have not yet been able to achieve the growth in revenues expected.
Quarter four is the key trading period in the beverage industry and the challenge will be to recover the shortfall experienced in recent months. Unless trading conditions improve, there is a risk our full year results could be between €5m and €10m below expectations.
Looking forward we believe that some level of disruption may continue into the early part of next year, after which we expect to see a return to more normal trading patterns.
The company’s shares are currently down 67.9p or 22% to 232.5p, the biggest faller in the FTSE 250.
