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Eastern Europe focussed spirits distiller Stock Spirits Group (STCK) has said it is on course to hit full year guidance despite tax issues in Poland and “highly competitive” trading conditions.

The Polish and Czech spirits markets, which together deliver approximately three-quarters of the group’s revenue, continued to show growth in both volume and value terms.

The group’s Polish business has continued to perform well despite trading conditions remaining “highly competitive”. It has outperformed total vodka growth in both the clear and flavoured sub-categories, and gaining volume and value share.

It Czech business also outperformed total spirits growth and achieved both volume and value growth, driven by strategic initiatives including premiumisation, new product development and the addition of the Beam-Suntory distribution brands.

The acquisition of Italian brand Distillerie Franciacorta, announced in January, was completed in early June as planned. Similarly the acquisition in the Czech Republic of the Bartida businesses, which are focused on the premium on-trade market, was announced and completed in May.

Group cash flow from operations for the year was strong, resulting in net debt at 30 September 2019 of circa €43m after the funding of the two acquisitions referenced above, compared to €32m in the previous year.

The solid performance comes despite its Polish subsidiary, Stock Polska, being issued with an assessment by the Polish tax authorities in respect of its 2013 corporate income tax return, which was appealed in January. The appeal is currently progressing and the company “considers it likely that it will ultimately be successful”.

In the Czech Republic, legislation proposing a 13% increase in excise tax on spirits from 1 January 2020 is expected to be ratified later this month. Stock Spirits said: “We are implementing a range of necessary actions ahead of this change. There have been no further indications in relation to any such changes in Poland or Italy.”

Full results for the year to 30 September 2019 will be released on 4 December 2019.

Morning update

On the markets this morning, the FTSE 100 has opened down 0.1% at 7,192.2pts.

Early risers include Glanbia (GLB), up 1.8% to €11.61, SSP Group (SSPG), up 1.8% to 619p and McBride (MCB), up 1.3% to 58.1p.

Fallers so far today include AG Barr (BAG), down 1.8% to 553p, C&C Group (CCR) in its first week as a fully listed UK stock, down 1.1% to 376p and Greggs (GRG), down 0.9% to 1,790p.

Yesterday in the City

The FTSE 100 started the week up 0.6% to 7,197.8pts on improving sentiment around global economic growth and an easing of the recently increased value of the pound.

The news that McBride (MCB) has appointed a new chairman yesterday helped the private label household goods manufacturer up 4% to 57.4p.

Other risers included Total Produce (TOT), up 4.8% to 120p, Nichols (NICL), up 3.3% to 1,550p, DS Smith (SMDS), up 1.8% to 341p, Ocado (OCDO), up 1.8% to 1,307p and Diageo (DGE), up 1.2% to 3,328p.

Yesterday’s fallers included Devro (DVO), down 10% to 180p, FeverTree (FEVR), down 5.4% to 2,125p, B&M European Value Retail (BME), down 2.9% to 356.1p, PureCircle (PURE), down 2.7% to 182.4p, Greggs (GRG), down 2.6% to 1,807p and McColl’s (MCLS), down 2.2% to 46.7p.

FTSE 100 names on the slide included Associated British Foods (ABF), down 1.8% to 2,165p and Coca Cola HBC (CCH), down 1.7% to 2,546p.

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