London-listed Polish vodka producer Stock Spirits' net profits have soared despite challenges in its Polish market and attacks from an activist investor.
Stock Spirits's net profits have soared 46.4 per cent to €28.4m (£24.6m).
However, net sales were down 0.6 per cent to €261m (£226m) from €262.6m a year before.
The drinks giant has acquired three alcohol brands in the Czech Republic, its second largest market, for a combined total of €5m (£4.3m).
In the last year, Stock Spirits signed new distribution agreements with Distell (Italy and Slovakia) and Synergy (Poland). It also launched new products, including Zoladkowa de Luxe pepper and Stock Prestige Monaco, as well as pushing Amundsen Expedition into new markets.
Why's its interesting
Stock Spirits has managed to boost its profits despite an attack from activist investor Western Gate Private Investments, which slammed the "ongoing poor corporate governance" at the company last year.
Western Gate is the investment vehicle of Portuguese businessman Luis Amaral and his family.
Commenting on the results, Amaral said: “Having initiated the root and branch strategic review, I cannot understand how the chairman of Stock Spirits can be ‘pleased’ with these results.
“As the biggest independent shareholder in Stock Spirits, we are concerned by these continuing trends. All the many changes the company has made in the last 12 months seem to have had no impact on what is important to investors: an improvement in the core market of Poland; and a reduction in bloated costs. Further radical change is required to address this downward spiral.”
Stock Spirits also struggled last year due to the Polish market being "highly competitive” and customers choosing cheaper products available at supermarket chains.
What Stock Spirits said:
Mirek Stachowicz, chief executive officer, said:
“2016 has been a year of significant change for Stock Spirits, and we have emerged from it in a much stronger position than we were in this time last year. Trading has remained challenging in our core Polish market, where there have been several significant changes in the competitive landscape.
"Against that backdrop, we are pleased to have made tangible progress across a range of strategic initiatives that are aimed at improving the long-term performance of the Group. Furthermore, we are now starting to see signs of stabilisation in our Polish business, as reflected by the market share gains that we achieved in both value and volume terms during the second half of 2016 versus the first half."