Stock Spirits shareholder battle rumbles on

Western Gate Private Investments has continued its criticism of what it calls “poor governance” at Stock Spirits after the central and eastern European producer cancelled its ‘investor day’.

Stock Spirits has warned investors its full year profits for 2013/14 may not meet expectations

Western Gate, the largest shareholder in Stock Spirits, said “questions” it has over the company’s future “remain unanswered”.

The shareholder has been engaged in a prolonged battle with the Stock Spirits board and management for a number of months, leading to the resignation of CEO Chris Heath.

Western Gate – which had previously cited a number of concerns with regards to Stock Spirits’ recent performance, including declining market share in Poland, an “under-performing” share price, and “spiralling” corporate costs – is run by Eurocash CEO Luis Amaral.

Earlier this month, the group hit out once again at Stock Spirits for “ignoring” shareholder wishes after the firm failed to appoint two new independent non-executive directors to any one of its four board committees.

The directors – Heineken Group’s Alberto Da Ponte and PepsiCo’s Randy Pankevicz – joined Stock Spirits following a campaign by Western Gate.

Now, Western Gate has accused Stock Spirits of “trying to avoid difficult questions” after the firm cancelled its ‘investor day’.

“By cancelling its investor day, we wonder whether Stock Spirits is trying to avoid answering difficult questions from shareholders about the conduct of the company and its performance,” said Amaral.

“We do now know that the board has ignored shareholders’ express wishes by excluding the two new independent non-executive directors appointed in May 2016 from joining any of the four board Committees.”

“Western Gate looks forward to the company’s November Q3 trading update, so that shareholders can judge the impact of its turnaround programme for the core Polish business.

“Shareholders will have waited two years for this turnaround since the company’s first disastrous profit warning on 5 November 2014.  We also ask that the update explains what the company is doing to address its excessive head office costs, which if anything look to be increasing now the board has been expanded to nine people.”

Stock Spirits has issued a statement claiming that while it had considered hosting an investor day, it no longer felt the event was necessary.

“This is due to the fact that, having had extensive engagement with our shareholders since the company’s interim results in August, we are pleased to have received the feedback that our strategy and investment case are well understood,” a spokesperson for the group said.

“In light of this, and considering the substantial investment and resources that go in to preparing for and holding an event of this kind, we have decided that it would not currently be the best use of management’s time. Our full focus must now be, as always, on growing and improving the business for the benefit of Stock’s customers, consumers and investors.”

With regards to Western Gate’s outstanding “questions”, Stock said: “We are in constant communication with our shareholders, and the vast majority of our investors are happy with the level of disclosure that the company gives around its financial and operational performance.

“None of our investors would expect us to give selective disclosure of this kind, and particularly not when the information is of a commercially sensitive nature and would be provided to a shareholder who is also a valued customer of Stock Spirits.”