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Stock Spirits shareholder asks CEO to step down

Stock Spirits’ main shareholder Western Gate Private Investments Limited has asked the firm’s CEO, Chris Heath, to step down as director of the company.

Chris-Heath
Chris Heath, CEO of Stock Spirits, has been asked by the group’s key shareholder to quit

Western Gate – the largest individual shareholder in Stock Spirits with a 9.7% stake – has requested Stock Spirits employ an executive search firm to find a “suitable replacement” for the position.

The shareholder cited numerous concerns about Stock Spirits’ performance over recent years, firstly highlighting the group’s market share decline in Poland from 38.4% at the company’s IPO in October 2013 to 26.3% in December 2015.

A 34% drop in Polish revenue accompanied this between the group’s 2013 and 2015 fiscal years.

Secondly, Western Gate noted an “under performing share price” of 148p – more than half of the company’s peak 315p and 37.1% below the listing price of 235p.

The third concern highlighted “spiralling” corporate costs, which have grown 11% since 2011, while revenues dipped 11% over the same time frame.

It continued to state it believes the executive management team has “run out of ideas” regarding how to “stem the ongoing market share losses” affecting the business in Poland and that the board would “benefit from added relevant experience, a fresh perspective and renewed energy”.

Lack of ideas

Western Gate’s Luis Amaral said: “Financial performance has been poor, market share has been lost in its core Polish market, salaries and costs are too high and remote control management of the business from the UK, where the company has no major revenue generating operations, is clearly not working.

“The executive team consistently blames others instead of being on the ground in Poland and addressing the local market dynamics and managing the business.

“A fresh perspective on the board will benefit all stakeholders.”

Western Gate has put forward two “outstanding candidates” as independent non-executive directors who have been assessed by Heidrick & Struggles, Alberto Da Ponte and Randy Pankevicz.

Da Ponte boasts 25 years’ experience in the drinks industry and has run businesses for Heineken Group, Scottish and Newcastle, Unilever and Cadbury Schweppes.

Pankevicz also has 25 years’ experience in the drinks industry, working primarily at PepsiCo International as senior commercial, operational and financial positions across its Central and Eastern European divisions.

Western Gate has written a letter to Stock Spirits’ shareholders outlining its “rationale” for the proposals.

In January this year, Stock Spirits said it would undertake a “root and branch” review of its corporate strategy, focusing mainly on its Polish business, following ongoing sales woes.

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