Stock Spirits acquires BartidaBy Nicola Carruthers
Central and Eastern European drinks group Stock Spirits has reported a 9.7% operating profit increase in the six months to March 2019, at the same time as announcing the acquisition of spirits firm Bartida.
In the six months ending 30 March 2019, the firm’s operating profit grew to €29 million (US$32.5mm), while total revenue increased by 8.2% to €156.9m (US$176.1m) due to “strong increases” in volume, mix and the “continuing success” of Stock Spirits’ premiumisation strategy.
The company announced the acquisition of on-trade spirits business Bartida in the Czech Republic for €7.3m (US$8.2m), with an additional deferred consideration of up to €3.7m over five years.
The deal, which also includes sister company Bartida Retail, aims to strengthen the firm’s position as a leading player in the on-trade.
As part of the transaction, the current owners will continue to work with Stock Spirits for five years to “ensure a smooth and successful transition and continue to drive future growth”.
Bartida’s portfolio includes both own-label brands and third-party distribution brands, and covers rum, fruit spirits and liqueurs across the premium segment. The firm also has its own online shop, demonstration bar and on-trade training centre in Prague.
Earlier this year, the group signed a deal to acquire Italian grappa producer Distillerie Franciacorta for €23.5 million (US$27m). The deal is expected to be completed by June 2019.
Stock Spirits’ Polish and Czech business delivered “good growth” in market share, sales and profits.
The vodka category in Poland grew by both volume and value, in particular the flavoured sector and premium segments, due to “increasing consumer affluence”.
In the Czech Republic, rum, vodka and whisky are in volume and value growth, offsetting a contraction in herbal bitters.
Italy, which represents around 8% of the group’s revenue, “remains challenging”, with revenue, profits and margins down.
In 2017, the firm moved into the Irish whiskey category with the purchase of a 25% stake in Dublin Liberties Distillery. The brand home opened in February 2019 and the distillery is now generating its own liquid to lay down and mature for the brands.
“We are pleased with the ongoing performance of our business, particularly in Poland and the Czech Republic and are continuing to deliver against our four pillar strategy,” Stock Spirits said in a statement.
“Following the recent agreements to acquire businesses in Italy and the Czech Republic, we continue to assess a range of acquisition opportunities that would deliver enhanced growth and shareholder value for the future.
“However, as we have said previously, if no significant M&A (mergers and acquisitions) occurs then we will consider additional shareholder distributions.
“Overall, we continue to believe that the strength of our brands and the viability of our strategy means that Stock Spirits is well positioned for further success in FY19 and beyond.”