Stock names permanent CEO as H1 improves
Stock Spirits has appointed Mirek Stachowicz as its permanent CEO following the resignation of Chris Heath, at the same time announcing bolstered half-year results.
Miroslaw ‘Mirek’ Stachowicz, an independent non-executive director of Stock Spirits since November 2015, has served as interim CEO at the Central and Eastern European spirits producer since April 2016 when Heath stepped down.
The executive took early retirement with immediate effect following an internal revolt by Stock’s largest shareholder Western Gate Private Investments Limited, which has a 9.7% stake in the firm.
Western Gate received support from other shareholding companies in its calls for Heath’s resignation, citing a number of concerns including declining market share in Poland, an “under-performing” share price, and “spiralling” corporate costs.
In 2015, Stock Spirits’ operating profit plummeted 22% to €41.7 million, as total revenue dropped almost 11% to €262.6m due to tax hikes in Poland and “severe pressure” from competitors.
Stachowicz, who currently serves as supervisory board member of Harper Hygenics SA, CCC SA and Page SA, all of which are listed on the Warsaw Stock Exchange, was initially hired as interim CEO “until a suitable replacement is found”.
However, David Maloney, chairman of Stock Spirits, said that following an international search, the company concluded that due to his “extensive knowledge of both the Stock Spirits business and consumer brands across the CEE region”, Stachowicz was the “ideal candidate”.
“He has already made a significant impact on the business and we are delighted to see improved performance in our important Polish market under his leadership,” added Maloney.
Bolstered H1 performance
Following extreme challenges in 2015, Stock Spirits has reported an improved H1 2016, with revenue increasing to €116m, compared to €108m in 2015, and operating profit hitting €12.5m, compared to €5.2m last year.
Profit after tax grew to €8.4m, compared to just €200,000 in 2015.
Stock Spirits said its primary focus in H1 has been the “stabilisation and turnaround” of its Polish business, with strategies now showing “early signs of positive results”, particularly with the steadying of the group’s market share in the country.
The group has set in motion “most” initiatives that were pledged as part of its “root to branch” review.
A “targeted price reduction” for a number of its core products Poland has allowed Stock Spirits to position itself more effectively with competitor brands.
The group has also taken the “important step” of recruiting a full management team – including a managing director, finance director and sales director – to replace group personnel who had been running the Polish business since early 2015.
In line with its ambition to expand its portfolio in the premium segment, Stock Spirits has signed an exclusive distribution agreement with Synergy to distribute Beluga Vodka in Poland, as well as with Distell to distribute its portfolio in Slovakia and Italy.
As part of its efforts to cut corporate costs, the group said it will close its Swiss office – leading to the departure of chief operations officer Ian Croxford with immediate effect. The position will not be replaced.
Stock Spirits also said will not undertake any M&A activity in 216.
“Today we have reported EBITDA growth across all our markets for the first half of this year, after a difficult 2015, showing that the many initiatives we have put in place in Poland are starting to show positive results,” said Stachowicz.
“Although the recovery is in its early days, I am confident that, along with our strengthened management team in Poland, we will be able to build on this encouraging start over the coming months.”