The firm, whose brands include 1906 vodka and Napoleon Ambassador brandy, said in an update for the year ended September 30 that the impact of coronavirus on its second half had been “less than initially anticipated” with a strong off-trade performance driven in part by on-trade restrictions, lockdowns relaxing earlier than planned and its brands benefitting from a general ‘staycation’ trend.
Poland and Czechia, which together account for around three-quarters of the company’s revenues, had “continued to show strong growth” in both volume and value terms, Stock said, despite excise increases during the year and an impact from the pandemic.
The Polish business had outperformed the total vodka market, particularly in the group’s flavoured vodka portfolio, while the Czech business grew absolute retail value sales more than any other spirits competitor in the market as a result of what the company said was the success of strategic initiatives including further core brand premiumisation and new product development.
Meanwhile, the firm said the contribution of Bartida, a high-end on-trade spirits business it acquired in May last year, had exceeded expectations, while another 2019 purchase, Distillerie Franciacorta, had delivered a “small positive contribution” in the year just ended despite a “challenging environment” in Italy.
Looking ahead, the company said it has lodged an appeal against an assessment by the Polish tax authorities in respect to the 2013 Corporate Income Tax Return of its subsidiary, Stock Polska, and that while the hearing is not expected for a number of years, they considered it likely that the appeal will be successful.
The group added that the Polish government has decided to apply additional tax on small format pack sizes (300ml or smaller) of alcohol from January 1, 2021, although they said it is too early to accurately forecast the impact of the legislation on its Polish business.
Despite this, investors cheered the better than expected trading, with the shares up 4.7% at 235.5p in early deals.