WOOD Flash – Stock Spirits Group: 1H FY20/21 results – flat quarter yoy, with cautious outlook for 2H 20/21E
Stock Spirits Group (SSG) released its 1H FY20/21 results today (12 May). The numbers were broadly flat on a yoy basis and, stripping out the exceptional items booked in 1H FY19/20, the net profit was also flat, despite the ongoing pandemic impact on the on-premise channel. However, the numbers were also double digits above our EBITDA forecast, on a better-than-expected margin performance in Italy and the other export markets. Management remains cautious on FY20/21E and we see some uncertainties for the 2H FY20/21E trading: 1) the small-tax format impact was limited to only one month (due to channel loading); 2) spirits continued to benefit from lower exposure to the on-premise in Poland, with a potential share loss to wine/beer as reopening takes place eventually; 3) competitive pressure in the Czech Republic. We reiterate our HOLD rating on SSG, with a price target (PT) of GBp 317/share.Stock Spirits Group is a spirits company. Co. along with its subsidiaries are engaged in the production and distribution of branded spirits in Central and Eastern Europe. Co.'s spirits include vodka, flavoured vodka, rum, brandy and herbal bitter liqueurs. Co. has more than 40 brands and export internationally to more than 40 countries worldwide. Co.'s brands include Zoladkowa de Luxe, Lubelska, Zoladkowa Gorzka, Stock Prestige, 1906, Fernet Stock, Bozkov, Amundsen, Keglevich, Limonce, Stock Original, Keglevich, Golden, Stock 84, Fernet Stock Citrus, and Hammerhead. Co. has operations in Poland, Czech Republic, Italy, Slovakia, Croatia, and Bosnia and Herzegovina.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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