This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
Stock Spirits shareholder demands dividend payment
Investment firm Western Gate is calling on Stock Spirits to pay investors a special dividend, claiming it is “unacceptable” that “shareholders are not receiving any value” from their backing.
Stock Spirits is facing calls to pay a “special dividend” to its shareholders
Western Gate, which owns a 10% stake in the Amundsen Vodka maker, is calling for a payment of €0.1219 (US$0.14) per ordinary share and a review of Stock Spirits’ capital allocation policy.
Francisco Santos, director of Western Gate, said: “We have previously requisitioned the company for change, and this has resulted in an improved recent performance.
“Despite this, patient shareholders have seen the share price fall 15.42% in the past five years and will receive no value from the company’s acquisitions until 2023.
“The company has plenty of headroom to increase leverage to 1.25x EBITDA, well inside the management target of 0.5x – 1.5x EBITDA and as such we believe should be rewarding shareholders with a special dividend.
“We demand a review of the capital allocation policy and the payment of a special dividend to align shareholder returns to the sector peers.”
Western Gate claims that Stock Spirits offers one of the lowest cash returns to shareholders among its peers, with a current dividend payout of 60.5% versus an average across the sector of 71.29%.
The investment firm also complained that the three acquisitions – 25% of Quintessential Brands’ Dublin Liberties Distillery Company in 2017, Distillerie Franciacorta in 2019 and Bartida in 2019 – have added €0.00 of EBITDA in 2019 and that shareholders will not see any returns on this invested capital until 2023.
In a statement to The Spirits Business, Stock Spirits said: “We note the announcement from Western Gate setting out proposals relating to a special dividend. We enjoy regular and proactive dialogue with all of our shareholders, and always take into account the broad range of their viewpoints. We have a strategy of both organic and M&A-driven [mergers and acquisitions] growth which, as our recent full-year results show, is driving a strong financial and operational performance.
“We continue to assess a range of more meaningful and value-creating M&A opportunities in both existing and new categories and markets. However, as we have consistently said, if such opportunities are not realised we will of course consider making additional shareholder distributions.”
Earlier this year, Western Gate called for the removal of Stock Spirits’ chairman and senior independent director over concerns regarding “significant shareholder value destruction”.