Stock Spirits Group PLC (LON:STCK) shares rose by more than 2% on Wednesday after its first-half results beat expectations with volumes, revenue, profit and margins all growing well during the period.
The central and eastern European-branded spirits producer reported a 9.7% rise in operating profit to €18mln on revenue up 5.3% to €124.1mln in the six months to the end of June 2018.
The company said the stabilisation of its Polish business had helped to deliver revenue and volume growth despite highly competitive industry pricing.
During the period, Stock Spirits invested in a range of new products, including the re-launch of Zołᶏdkowa de Luxe vodka. It also released a Prestige ‘World Cup’ limited edition vodka and Božkov Republica rum in the Czech Republic.
“Despite some challenges in our core markets, and in particular the competitive pricing environment in Poland, we believe that our ongoing focus on investment in our brands, product innovation and premiumisation are working well and we are well positioned to achieve further growth in the second half of the year and beyond,” said Mirek Stachowicz, Stock Spirits Group’s CEO said in the results statement.
In a note to clients, analysts at Numis Securities said Stock Spirits delivered a “creditable performance in the challenging trading conditions across its core markets”.
They added that the performance in Poland, in particular, should reassure investors that it can achieve profitable growth despite the oppressive pricing environment.