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Turnaround dividing opinion at Polish vodka business

Stock Spirits (STCK) 179.75p

Gain to date: 10.3% 

Original entry point: Buy at 163p, 18 August 2016

A bold call on the turnaround afoot at Central and Eastern European branded spirits and liqueurs producer Stock Spirits (STCK) is 10.3% in the money. Not everyone is impressed with the progress to date though.


In-line full year results (8 Mar) served up by new CEO Mirek Stachowicz showed growth in volume and strong cash generation. Stock Spirits says it is pressing ahead with cost cutting initiatives and becoming more competitive in its key market Poland. Price cuts for key brand Zoladkowa de Luxe are helping to regain customer support.

However Luis Amaral, the Portuguese businessman and biggest independent shareholder, takes a different view. He argues ‘costs have not fallen at all’ and ‘shareholders simply do not understand why the company insists on keeping its expensive head office in the UK.’

Amaral also contends: ‘All the many changes the company has made in the last 12 months seem to have had no impact on what is important to investors: an improvement in the core market of Poland; and a reduction in bloated costs. Further radical change is required to address this downward spiral.’

Amaral’s comments could be the precursor to a more substantial overhaul of the strategy and we stay bullish. (JC)

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