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Eastern European-focused liquor producer Stock Spirits Group (STCK) has reported minimal impact on trading from the coronavirus pandemic.
The company said trading remained resilient after reporting a 15% increase in revenues to €189m in the six months to March 31.
Operating profits rose 32% to €38.8m, on volumes up 8.4% to 8.1m, of nine litre cases.
Following the year end, the development of the coronavirus pandemic was managed in a “decisive” manner, the company said, carrying out proactive contingency actions focused on people and safety, continuity of production and supply, and support of local communities, such as large-scale manufacturing and donations of hand sanitiser.
So far, the company has earmarked exceptional costs of €14.2m due to an impairment of its minority investment in Quintessential Brands Ireland Whiskey and net release provisions for contingent consideration of €1.6m. There are also €1.3m of costs related to postponed M&A work.
CEO Mirek Stachowicz said: “These strong results are a testament to the quality of our brand portfolio, the strength of our customer relationships, and the resilience of our business model. It is also these attributes that have enabled us to successfully manage the excise changes that were implemented earlier in the year in our key markets of Poland and the Czech Republic.
“The COVID-19 pandemic reached our markets towards the end of the period and, as a result of our long-standing focus on the off-trade, our broad portfolio of local brands, and our strategy of sourcing and manufacturing our products locally, it has had a minimal impact on our operations to date.”
He added: “There remains robust demand for our products, but we are monitoring developments closely and are able to respond quickly if required. Our first priority continues to be the health and well-being of our employees, and I would like to thank them all for their extraordinary resilience, loyalty and hard work during this period.”
Morning update
UK retail sales dropped almost 20% in April as the first full month of lockdown hit shops up and down the country.
The nationwide lockdown imposed to slow the spread of the coronavirus pandemic in the UK showed its full effects in April, with total retail sales dropping 19.1% compared to an increase of 2.4% in April 2019.
This is once again the “worst decline” reported by the BRC-KPMG retail sales monitor since it began in 1995.
It is also below the 3-month and 12-month average declines of 7.5% and 2.3% respectively, both record declines in themselves.
“With lockdown measures in full swing, April saw a record fall in retail sales. For many non-food goods, such as clothing, footwear and large household items, the decline was particularly steep as consumers responded to lockdown conditions,” said BRC CEO Helen Dickinson.
“The proportion of goods purchased online rose sharply, with products such as games consoles, bicycles, office equipment, and haberdashery, all high on the list. However, even the dramatic rise in online sales could not make up for the loss of instore purchases.”
Like-for-like retail sales rose 5.7% from last year, excluding temporarily closed stores but counting on online sales, with most of the growth driven by the latter.
Over the three months to April, in-store sales of non-food items declined 36% on a total basis and 17.3% on a like-for-like one.
Over the same three-months period, food sales rose 6%, on a like-for-like basis, and 4.5% total. But if considering only April, food sales were in decline year-on-year.
Susan Barrat IGD CEO said: “April was another busy month for food retailers as they adapted to in-store social distancing and built capacity for surging demand in online shopping.
“However, sales were more restrained than the high peaks of March and current restrictions on social gatherings will have dampened any seasonal boost expected from Easter.”
Online sales skyrocketed 58% against a 4% growth last year, as shoppers increasingly turned to online shopping for their needs.
Roadside convenience store Applegreen (APGN) has secured further financing to enhance access to liquidity during the coronavirus pandemic.
The company has converted €52.5m of the accordion facility in its existing banking facilities into its revolving credit facility, which represents an increase to the committed funding available for the remaining term through to October 2023.
The company stressed that, whilst important to have additional headroom in its facilities, it does non intend to draw them down.
“We reiterate our view that we have sufficient cash to get us through this cycle based on a scenario where movement continues to be severely restricted to the end of May with the expectation that restrictions will then ease gradually before normalising in Q4,” Applegreen added.
“We also expect to have adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.”
The FTSE 100 started the day 0.9% lower at 5,940.50pts.
In the red, tesco (TSCO) opened 0.5% lower at 245.50p, Morrisons (MRW) down 1% at 193.25p, Sainsbury’s (SBRY) down 1% at 193.15p and Marks & Spencer (MKS) down 1% at 92.02p.
Risers included Stock Spirits Group (STCK) up 7% at 207.50p, Premier Foods (PFD) up 1% at 45.50p and Hotel Chocolat (HOTC) up 1% at 305p.
Yesterday in the City
The FTSE 100 closed up 0.9% at 5,994.77pts.
Risers saw Associated British Foods (ABF) close up 4.4% at 1,800p, Ocado (OCDO) up 6% to 2,029p, British American Tobacco (BATS) up 3.6% at 3,156.50p and Morrisons (MRW) up 3.4% at 195.20p.
Among the fallers Glanbia (GLB) was down 2.8% at 9.68p, Greggs (GRG) closed 1.6% lower at 1,565p and WH Smith (SMWH) ended the day 5.7% lower at 907p.
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