Stock Spirits Group PLC

Preliminary results for the year ended 30 September 2020

A resilient performance during uncertain times, with results ahead of expectations

2 December 2020: Stock Spirits Group PLC ("Stock Spirits" or the "Company"), a leading owner and producer of branded spirits and liqueurs that are principally sold in Central and Eastern Europe and Italy, announces its results for the year ended 30 September 2020.

 

Highlights:

	Reported results			Underlying results at constant1currency excluding acquisitions made in 2019
All values in € millions unless otherwise stated	12 mth to Sept 2020	12 mth to Sept 2019	% change	Underlying 12 mth to Sept 2020	Underlying 12 mth to Sept 2019	%  change
Volume (millions 9 litre cases)	14.8	14.4	3.0%	14.6	14.4	1.8%
Revenue	341.0	312.4	9.1%	324.5	303.6	6.9%
Adjusted EBITDA2	71.0	67.0	6.1%	68.9	65.9	4.6%
Operating profit before exceptional expenses	57.8	54.5	6.0%
Operating profit	33.6	42.9	-21.5%
Profit for the year	19.6	28.4	-31.2%
EPS basic - €cents per share	9.83	14.33	-31.4%
EPS adjusted basic - €cents per share2	21.42	19.75	+8.5%
Net debt	22.7	55.4	-59.1%

All comparative figures for the 12 months to September 2019 have been restated to align with the new IFRS16 requirements, which were adopted by the Group on 1 October 2019.

·    Underlying volumes up +1.8%, underlying revenue up +6.9% and adjusted EBITDA up +4.6%: a resilient performance against the backdrop of the global pandemic in H2, and excise tax increases in Poland and the Czech Republic in H1

·    Revenue and EBITDA in Poland up +15.1% and +18.3% respectively (at constant currency), with our market share in the key vodka category at a five year high of 31.6% as at September 2020

·    A robust response to COVID-19 with no disruption to operations and no use of furlough schemes or other government assistance

·    Positive contribution from 2019's acquisitions - Bartida in the Czech Republic, and Distillerie Franciacorta in Italy - despite on-trade lockdowns in both of those markets

·    Cash conversion remains strong, delivering 112.1% (2019: 91.5%), with close working capital management through the pandemic. Net debt of €22.7m at 30 September 2020 equates to leverage of 0.32x³

·    Exceptional items total a net €23.0m; of which a net €21.1m are non-cash items (largely impairment of our traditional Italian brands and Irish whiskey investment), and €1.9m of cash items

·    Total ordinary dividend for the year +6.8% at 9.55 €cents per share (after a proposed final dividend of 6.78 €cents per share, up +7.4% up on last year's final dividend⁴); in addition the Board is proposing a special dividend of 11.00 €cents per share

 

Commenting on the results, Mirek Stachowicz, Chief Executive Officer, said:

"We are pleased to have delivered a resilient performance against the backdrop of a hugely challenging year. In H1, we successfully navigated excise tax increases in our largest markets of Poland and the Czech Republic. In H2, we prioritised protecting and supporting our employees, customers, suppliers and the communities around us in the face of the COVID-19 pandemic.

Our strategy of sourcing and manufacturing nearly all of our products locally ensured that there has been no disruption to our operations. In addition, our longstanding focus on the off-trade served us well during the closure of the on-trade as a result of lockdowns. Our portfolio of brands performed strongly, boosted by consumers opting to buy familiar and trusted local brands during times of uncertainty, as well as by the trend towards staycations in our markets. Our strong operational and financial performance has enabled us to continue to invest in our brands and our business, and to return surplus cash to our shareholders in the form of a special dividend.

While there remains some uncertainty in the short-term outlook, in the longer term we are confident that we will emerge from the pandemic with an even more loyal and engaged consumer base, closer customer and supplier relationships, and a stronger business than ever before. As such, we remain confident in the future prospects of Stock Spirits."

 

ENDS

 

Analyst presentation

Management will be hosting a presentation via an audio webcast and conference call which will be hosted by CEO Miroslaw Stachowicz and CFO Paul Bal at 9:00am (GMT) on Wednesday 2 December 2020. Dial-in details are below. Please dial-in at least 15 minutes prior in order to ensure a timely start to the briefing.

Audio webcast:         https://edge.media-server.com/mmc/p/xq5wybb7

 

Conference call:

 

Location	Phone Number	Passcode
International	+44 (0) 2071 928 338	3728837
UK	0800 279 6619

                                   

Please note that questions will only be taken over the conference call and not the audio webcast.

A replay of the audio webcast will be available shortly afterwards on the same link as above.

 

A webcast of the presentation will also be available via www.stockspirits.com and a recording made available shortly afterwards. 

 

For further information:

 

Stock Spirits Group: Paul Bal	+44 (0) 1628 648 500
Powerscourt Rob Greening Lisa Kavanagh Bethany Johannsen	+44 (0) 207 250 1446 stockspirits@powerscourt-group.com

A copy of this preliminary results announcement ("announcement") has been posted on ww.stockspirits.com.

Investors can also address any query to investorqueries@stockspirits.com.

 

About Stock Spirits Group

Stock Spirits is one of the leading branded spirits and liqueurs businesses in Central and Eastern Europe and Italy, and offers a portfolio of products that are rooted in local and regional heritage. With businesses in Poland, the Czech Republic, Slovakia, Italy, Croatia and Bosnia & Herzegovina, Stock Spirits also exports to more than 50 other countries worldwide. Global sales volumes currently total over 125 million litres per year. 

Stock Spirits has production facilities in Poland, the Czech Republic, Germany and Italy. Its portfolio includes well-established "millionaire" (selling in excess of one million 9 litre equivalent cases per annum) brands including Żołᶏdkowa, Lubelska, Božkov and Stock Prestige, local leaders such as Stock 84 brandy, Fernet Stock bitters, Keglevich and Limoncè, as well as more recent innovations including Amundsen Expedition vodka and Božkov Republica rum.

Stock Spirits is listed on the main market of the London Stock Exchange. For the year ended 30 September 2020 it delivered total revenue of €341.0m and operating profit before exceptional items of €57.8m.

 

For further information, please visit www.stockspirits.com
 

Chairman's Statement

As Chairman of Stock Spirits Group PLC, I am pleased to present our preliminary results for the year ended 30 September 2020.

This year has brought challenges like no other, but we have demonstrated great resilience across the Group. The early response of governments in our key markets shielded us from the worst effects of the pandemic, but we have still had to adapt and respond to protect our people and maintain production for our customers and consumers. To that end I, and the entire Stock Spirits Board, want to thank all our teams for their continued hard work, professionalism and dedication in delivering outstanding service to our customers in hugely demanding circumstances.

Dividend

Our resilient performance has enabled us to redefine our progressive dividend policy and deliver a higher pay-out than in recent years. Our proposed final dividend for the year is 6.78 €cents per share (2019: 6.31 €cents) and is a +7.4% increase on last year's final dividend. There were no acquisitions during the year and, while we continue to assess a range of opportunities, the continuing pandemic means that we are unlikely to complete a meaningful and value-creating acquisition in the near-term. The Board has consistently said that it would consider additional distributions to shareholders under such circumstances. Taking into account our robust operational and financial performance that has resulted in our strong capital position, the Board is also proposing a special dividend of 11.00 €cents. This results in total dividends for the year of 20.55 €cents per share, up +130% on the total dividend for the prior year (2019: 8.94 €cents per share).

Looking ahead

We are still in a time of huge uncertainty due to the ongoing effects of the pandemic, and ensuring that Stock Spirits continues to stay resilient, agile and responsive will be the Board's key focus in the coming months. However, I am confident that we have the right business model and strategy in place, and that our collegiate, collaborative culture - at Board level and throughout the Group - will result in decisions and actions being made to secure the success of Stock Spirits for the long term.

Chief Executive Statement

Against a challenging backdrop, I am pleased to report that we have delivered revenue of €341.0m and adjusted EBITDA of €71.0m, an increase of +9.1% and +6.1% respectively. Excluding the acquisitions completed in 2019, and on an underlying constant currency basis, these increases were +6.9% and +4.6% respectively. Like all companies, we have been tested this year, but our unique locally-focused business model has proved resilient against the pandemic, and our culture of small company agility saw every member of the Stock Spirits team rise to the challenge. I thank all of our colleagues for their dedication in the face of difficult working conditions.

H1: good strategic progress whilst responding to significant excise increases

The year began with uncertainty due to the impending increases in spirits excise tax in both Poland and the Czech Republic, our two largest markets which account for more than 80% of our revenue and profits. However, as reported at our half-year results in May, we performed above expectations due to extensive preparations and management of the changes.

We were also making good progress against our M&A objectives. However, work has been interrupted by COVID-19. This resulted in the write-off of the €1.3m invested in preparatory work. The first pandemic wave also impacted heavily on our investment in the Quintessential Brands Irish whiskey joint venture and resulted in an impairment of €14.2m.

H2: demonstrating resilience in the wake of COVID-19

With c.15% of the Group's revenues historically coming from the on-trade, we have inevitably suffered some loss of revenues due to the widespread closures of on-trade channels as a result of the pandemic in H2.  However, our long-standing focus on the off-trade and no reliance on duty-free channels stood us in good stead. Our portfolio of local brands performed very well as shopping habits changed and consumers reverted to familiar and trusted brands in uncertain times. This trend was further boosted by "staycations" during the summer.

The extent of this mitigation was particularly evident in the Czech Republic where on-trade would normally account for over 30% of revenues. Despite losing much of the on-trade business for some four months, underlying Czech revenue for the year was almost flat and underlying adjusted EBITDA was up +2.3% (all at constant currency) .

Italy and Croatia, heavily reliant on tourism and on-premise consumption, were the two markets where we felt the most severe impact of the pandemic, resulting in the impairment of €9.6m taken against our traditional Italian brands in H2.  This impairment does not involve the newly-acquired Distillerie Franciacorta brands that performed with pleasing resilience.

Our operating model - built on localised sourcing and manufacturing prevented disruption to our supply chains by border closures. Local relationships with our customers were further strengthened as we temporarily extended credit terms where necessary. Our close ties with local suppliers ensured continuity in the supply chain.

During lockdowns, we leveraged our digital platforms to stay in touch with our consumers and assist key stakeholders. For example in Italy, our 'Skip the Ordinary' online campaign for Keglevich has been a significant success, drawing an online audience of over five million views and making a substantial contribution to strengthening Keglevich's share in the flavoured vodka category from 73.6% to 77.7%⁵.

Despite the impact of COVID-19, both of the acquisitions made in 2019 performed strongly. Distillerie Franciacorta in Italy showed resilience in the face of very challenging market conditions. It delivered a small positive EBITDA contribution this year, and we continue to expect it to be earnings enhancing in 2021. Bartida, the acquisition in the Czech Republic, performed extremely well, delivering €1.5m in EBITDA in the year - well ahead of our expectations despite its reliance on on-trade distribution.

New Product Development  ("NPD")

Another strategic response to COVID-19 involved accelerating our NPD programme leveraging our strong routes-to-market and introducing new products faster than our competitors. In Poland, our NPD focused on the more profitable flavoured vodka. A notable example was new Żołądkowa Gorzka Rześka, which sold over one million litres in its first six months. As a result, we significantly improved our market share of these higher-margin products.

We also enjoyed positive results from repositioning the Fernet brand in 2019, with the premium variant Fernet Stock Barrel commanding a retail price c.28% above mainstream Fernet Original.

Sustainability

Given the resilience of our performance, we were able to continue with investments in key projects to develop a more sustainable business model for the future. Planning work continued on the new distillery at our Lublin facility and, whilst we have had to manage the uncertainties around COVID-19, we still expect it to come on-stream in FY2023 as planned, and deliver a five year pay-back. Our OneSAP project to develop and implement a Group-wide enterprise resource planning solution also continued largely unaffected and is making good progress.

Prioritising our stakeholders

The pandemic has provided us with an opportunity to demonstrate our firm commitment to the social aspects of our Environmental, Social and Governance agenda. Although our resilience to the crisis has benefitted all of our stakeholders, our top priority throughout remains the health and wellbeing of our people. We implemented an extensive range of cleaning and social-distancing measures to provide on-site workers with a safe working environment and office-based staff have predominantly been working from home since March.

We have not utilised government support such as furlough schemes or other similar initiatives. Furthermore, there have been no lay-offs or pay reductions as a result of the pandemic. In fact, we rewarded many of our staff with additional incentives for their hard work and dedication when faced with more demanding working conditions in our manufacturing and logistics facilities.

We carried out our annual employee engagement survey in March in the midst of COVID-19 in our main markets. It received a record response, and showed that our response to the situation improved engagement levels.

We are proud to be able to help many of our stakeholders as well. We produced hand-sanitiser in Poland, the Czech Republic and Germany, donating it to customers, local authorities and hospitals along with supplies of pure alcohol. We also allowed the Polish government to use our facilities to produce a spirit that was used in their own hand-sanitiser. Our support to stakeholders is perhaps summed up by our Czech business being nationally recognised by the CZECH TOP 100 Association, acknowledging them as 'heroes in the fight against Coronavirus'.

For our investors, the pandemic gave us opportunity to demonstrate how differentiated and resilient our business model is. While many companies reduced or cancelled dividends, we are pleased to be able to redefine and enhance what our progressive dividend policy means, as well as propose a special dividend.

Outlook

Our four-pillar strategy remains successful and as relevant as ever. We will continue to deliver value by focusing on premiumisation, millennials and digital, as well as being ready to re-start M&A activity as conditions permit.

We remain alert to new regulatory developments. In Poland, as previously announced, legislation was passed in the summer to implement additional taxes on small format pack sizes (300ml or smaller) of alcoholic products from 1 January 2021. We have in hand a range of potential commercial and operational actions to mitigate the possible impact, and our successful management of the recent excise changes gives us confidence in our ability to respond to this new development.

As we near the end of the Brexit transition period, our message remains that we expect to see no material impact on our business irrespective of the nature of the UK's final arrangements with the EU.

We take encouragement from the resilience that our business has shown in a year of challenges, from excise increases to the COVID-19 pandemic. Our products have shown themselves to be trusted brands, our customer and supplier relationships are stronger than ever before, and our business model has been proven to be strong throughout the crisis. While there remains some uncertainty in the short-term outlook due to the pandemic, we continue to see many opportunities for future growth in our markets, and to be confident in the long-term prospects of Stock Spirits.

Our markets in detail

Poland

Revenue for the year in Poland was significantly ahead of last year at €193.6m (2019: €171.7m), with adjusted EBITDA also showing strong growth at €49.9m (2019: €43.1m).

Market overview

Despite the +10.0% excise tax increase on spirits in January followed subsequently by the COVID-19 crisis, the total spirits market in Poland achieved value growth of +10.7% and strong volume growth of +3.7%⁶.

Poland is the world's third largest vodka market by value and volume, with the highest CAGR growth over the last five years of the top ten vodka markets in the world. Vodka is by far the largest spirits category in Poland (c.80% of total spirits volume)⁶.

Clear and flavoured vodka was by far the greatest contributor to total spirits growth, delivering c.60% of total absolute value growth, whilst 30% came from the second biggest spirits category, whisky⁶.

Total vodka category value growth of +8.4% during the last 12 months was well ahead of volume growth at +1.8%, in part driven by the excise increase, but also by the positive impact of premiumisation and reduced price-discounting during the pandemic⁷.

The fastest overall value growth rate was from the flavoured vodka sub-category at +8.8%, but the far larger clear vodka category also achieved value growth at +8.2% and was the greatest contributor to absolute growth⁷.

The global trend to premiumisation in spirits continued to be visible in Poland also during the period of pandemic. Total premium vodka achieved value growth of +16.0%, significantly ahead of the total category, reflecting Polish consumers' readiness to pay more for premium quality vodka as affluence increases. 

Performance of our core brands

Stock Spirits outperformed the total vodka market in Poland, driving continued share gains as we focused on profitable growth.  Stock grew total vodka volume +2.4% and value +9.2%⁷. Stock's total vodka volume share grew from 29.0% last year to 29.1% this year and value share grew from 29.5% to 29.7%⁷. Our market share growth accelerated in the second half of the year, and we achieved 31.6% value market share in the month of September, the highest in five years ⁷.    

The leading contributor to our clear vodka share growth was the continued success of our largest brand, Żołądkowa De Luxe, with a value growth of +11.1%⁷, supported by consistent consumer activation at the point of purchase.

Our brand leader in the premium segment, Stock Prestige, grew value by +5.4%⁷ and maintained its leadership of this increasingly competitive segment, despite being heavily impacted by the reduction in celebratory usage occasions as a result of the COVID-19 lockdown.

Amundsen Expedition, another of our premium vodkas, grew value by +15.1%, over triple that of the top premium segment where it is positioned, whose value growth was +5.0%⁷.

New Product Development

Stock Spirits grew total flavoured category volume and value versus last year, achieving our ambition to recapture the lead position in flavoured category growth. Żołądkowa Gorzka achieved MAT value growth of +17.5%⁷, supported by the roll-out of our Kolonialna premium new product development and the introduction of two new lighter tasting variants under the 'Rześka' ('Fresh') sub-brand. This broadened the brand's appeal to millennials, in particular female and young adult drinkers, and especially during the summer months.

Our largest flavoured brand, Lubelska, delivered +4.7%⁷ value growth despite the reduction in out-of-home small format impulse purchases, which is usually a significant proportion of the brand sales. The Saska flavoured range continued to build its position amongst emerging spirit drinkers, achieving MAT value growth of 23.3%⁷, supported by the roll-out of our highly successful new flavours such as mango in April 2020.

Small format tax

Legislation was passed in the summer of 2020 to implement additional taxes on small format pack sizes (300 ml or smaller) of alcoholic products from 1 January 2021. Our recent successful management of the excise changes earlier in the year gives us confidence in our ability to respond to this new development and we have in hand a range of commercial and operational actions to mitigate the impact from this legislation change.

Czech Republic

Revenue for the year also grew strongly in the Czech Republic to €87.3m (2019: €81.3m) due to the contribution of the prior year acquisition, with adjusted EBITDA at €26.1m (2019: €24.3m).

Excluding the impact of the Bartida acquisition completed last year and at constant currency, underlying revenue was flat at €78.1m (2019: €77.9m) whilst adjusted EBITDA for 2020 was up +2.3%, delivering €24.6m (2019: €24.0m).

Market overview

Stock has held spirits market leadership in the Czech Republic for over 20 years⁸ and has brand leaders in the key spirits categories of rum⁹, vodka and herbal bitter liqueurs¹⁰.

Total spirits in the Czech Republic's off-trade grew value at +11.0% and volume +5.6%, despite the spirits excise increase of 13.2% in January of this year and the subsequent impact of COVID-19¹⁰. The four core categories on which Stock focuses - rum, vodka, herbal bitters and whisky - together account for c.75% of total spirits volume, and are the key drivers of overall spirits performance. Double-digit value growth was achieved by rum, vodka and whisky. High growth from those categories off-set lower growth from herbal bitters¹⁰.

Performance of our core Brands

Overall performance of our Czech brands for the year was ahead of our expectations, particularly given our strong participation in the on-trade. Whilst value share declined slightly from 34.2% last year to 33.6% this year, the combination of our premium innovation, the benefits from previously acquired brands, and the contribution from our distribution brands delivered value growth of +8.8% and volume growth of +4.8%, maintaining market leadership and delivering the greatest absolute value growth in the market¹⁰.

Stock grew value share of the largest Czech spirits category, local rum, from 64.6% to 65.8%¹⁰, driven by our brand-leading Božkov Tuzemsky, which gained from shoppers' shift to trusted, well-known local brands, as well as consumers' increased at-home consumption during the pandemic. Božkov Republica maintained brand leadership of imported rum, supported by premiumisation through its award-winning new aged variant, Republica Reserva, despite the launch of an aggressively discounted 'look-alike' competitor.

In the highly price competitive vodka category, Stock maintained its brand portfolio value share leadership and grew value +13.4%¹⁰ in the face of aggressive discounting by private label and competitor brands which maintained their pre-excise increase price points.

These successes outweighed share decline in herbal bitters, where Fernet Stock's value share reduced from 28.0% to 26.5%¹⁰, driven by changed retailer promotional strategies coupled with continued aggressive price discounting by Jagermeister. Fernet Stock's share has been gradually recovering as the full re-launched range is established, and the resulting revised price architecture takes effect.

Acquisitions

Stock Spirits completed the acquisition of Bartida in May 2019, bringing new brands and step-changing our capabilities in the premium on-trade channel. Notwithstanding the significant impact of COVID-19 on the Czech on-trade in the second half of this year, the contribution from Bartida exceeded our expectations. In line with our plans, the business is earnings-enhancing in the first year after acquisition. This was possible thanks to the accelerated roll-out of the acquired brands and faster attainment of cost synergies. Bartida's expertise is also beginning to make a wider contribution across the Group.

Italy

Revenue for the year in Italy was ahead at €30.6m (2019: €26.9m), with adjusted EBITDA of €2.0m (2019: €3.6m).

Excluding the impact of the acquisition of Distillerie Franciacorta completed last year, underlying revenue and adjusted EBITDA for 2020 was €24.7m and €1.9m respectively (2019: €25.4m and €3.8m).

Market overview

Of all our markets, Italy was the most heavily impacted by COVID-19 and the on-trade holds the highest proportion of total spirits sales. Several spirits categories serve 'higher energy', social gathering-orientated usage occasions. The on-trade was shut down for several months during the pandemic lockdown, such usage occasions were curtailed, and both have yet to recover to historical levels.

Consequently, total spirits grew +7.8% value and +7.9% volume in the modern off-trade in 2020¹¹ but the total market (including on-trade) declined by -2.3% in value.

Performance of our core Brands

COVID-19 significantly impacted several of Stock's key categories, notably limoncello, the Beam Suntory range that was introduced in H2, and flavoured spirits. The resulting impact of this is an impairment against the carrying value of our historical Italian brands of €9.6m, classed as an exceptional item. At the same time, spirits categories in which we do not participate were impacted less severely. Due to the introduction of Beam, Stock Italia's value share of the total modern trade increased slightly to 7.2% (versus 6.9% last year)¹¹. Encouragingly, the last quarter of our financial year saw a stronger performance, with growth from grappa, brandy, clear and flavoured vodka. However, this was off-set by continued declines from Limoncè, whose usage occasions remained heavily impacted by COVID-19. Full production and bottling of Limoncè was restored to Italy during the last quarter of the financial year, with the expectation that this should facilitate our marketing of this iconic brand.

Acquisitions

The acquisition of Distillerie Franciacorta, completed in early June 2019, made Stock the number-one grappa player in the Italian off-trade.  It also enhanced our premium on-trade sales capabilities and tripled the size of our sales force, bringing growth synergies across the off and on-trade for all of our categories, and helping to secure Beam Suntory brands' distribution.

The acquisition provides a strong platform from which to enhance the provenance of Stock's Italian brand portfolio and generally rejuvenate our Italian business, starting with the "repatriation" of Limoncè. The acquisition is performing in line with our expectations to be earnings-enhancing in the current year despite the continuing challenging environment in Italy. Additionally, the stronger on-trade sales force resulting from this acquisition was a direct reason for gaining Beam-Suntory as a distribution partner in Italy in April 2020. Coinciding with the peak of COVID-19 in Italy, and requiring some upfront investment, the Beam agency will begin making a positive contribution to our results in 2021.

Other markets

'Other' markets include the results of Slovakia, Croatia and Bosnia & Herzegovina together with our export operations know as International, our Baltic distillery and UK corporate office.

Revenue for the year for Other markets was €29.5m (2019: €32.5m), with adjusted EBITDA of €3.4m (2019: €5.2m).

Slovakia

It was a challenging year in Slovakia, but one in which our expansion in rum - led by Božkov Republica -  coupled with a strong performance in vodka by Amundsen, enabled Stock to maintain its position as the second biggest player in the off-trade. Stock's total spirits value share declined slightly from 12.1% last year to 11.5% this year, and absolute value was -1.6% versus last year¹².

 

Share growth from Fernet Stock, Republica and our leading vodka brands was off-set by COVID-19-driven declines on the Beam Suntory range and Golden fruit spirits, whose categories are more dependent on 'higher energy' social gatherings, which were curtailed by the pandemic.

 

Other International markets

Croatia was severely impacted by COVID-19 given its heavy reliance on tourism and on-trade consumption. Nonetheless, Stock grew its brand leader Stock 84's share of imported brandy in absolute volume and value¹³.

In our export markets, COVID-19 had a negative impact on duty-free volumes as a result of reduced international travel, and also led to severe local lockdowns across many locations. The successful reorganisation of our route-to-market in Germany contributed volume uplift from new retail distribution via our partner Dovgan, notably for our Polish brand portfolio. The Distillerie Franciacorta brands acquired in 2019 were successfully introduced into 32 of our International distribution partners including Germany, the Netherlands, and the UK.

 

Chief Financial Officer Statement

Changes in accounting policies

Following adoption of IFRS 16 "Leases" from 1 October 2019, all comparative figures have been restated to comply with the new accounting standard and enable reporting on a like-for-like basis. Full details of the changes are set out in notes 3 and 15 of the consolidated financial statements. One consequence of this change is an improvement in EBITDA, operating profit and EBITDA margin, as certain operating costs associated with leases are now considered financing costs. The overall impact on operating profit is not material.

 

Underlying results

In the second half of the prior year, the Group completed two acquisitions - Bartida s.r.o. and Bartida Retail

s.r.o. in the Czech Republic, and Distillerie Franciacorta S.p.A. in Italy. In order to provide a comparison of the Group's results on a like-for-like basis, we also report underlying growth rates for key metrics (that exclude the impact of these acquisitions in both years) and is stated at constant currency.

 

Financial performance

Performance differed between the two halves of the year.  Our very strong year-on-year growth in the first half of the year was tempered in the second half as the COVID-19 pandemic impacted the on-trade and duty-free channels for several months. In the second-half of the year, underlying volumes, revenues and EBITDA were lower than the comparable period last year. However, the -1.9% underlying revenue decline in the second half of the year indicates that demand significantly shifted to the off-trade channel during this period.

 

Volumes for the year were up +1.8% on an underlying basis, as a result of continued strong performance in Poland. On a reported basis volumes rose +3.0% helped by the full impact of last year's two acquisitions. Reported revenue was up +9.1% to €341.0m (2019: €312.4m) and underlying revenue was up +6.9% to €324.5m (2019: €303.6m).  

 

The underlying revenue increase was predominantly driven by pricing (+4.5%), primarily in Poland where the excise tax increase was fully passed on, with a small margin. In Czech, the excise tax increase was only passed on where competition considerations allowed. There was a benefit from the 2019 acquisitions (+3.9%), but a negative impact from foreign currency movements (-1.7%), due to a slight weakening in the Polish złoty and the Czech koruna during the year versus the euro.

 

Revenue per litre¹⁴ increased +6.0% to €2.55 (2019: €2.41) mainly reflecting the mix benefit of last year's acquisitions, as well as the increased pricing in Poland and Czech following the excise increases. Cost of goods sold per litre¹⁴ increased +7.8% to €1.37 (2019: €1.27), mainly due to last year's acquisitions and an increase in third party distribution brand cost of goods. This mix reduced reported gross profit margin by 90bps to 46.4% (2019: 47.3%). Underlying gross margin was less impacted 47.0% (2019: 47.4%).

 

Selling expenses increased +8.1% to €65.9m (2019: €61.0m) from a combination of the full year impact of 2019's acquisitions and increased investment behind our brands and salesforce capabilities. Other operating expenses increased by +6.7% to €33.4m (2019: €31.3m) mainly due to higher staff costs, particularly in Central Europe, plus the increase from the full year impact of 2019's acquisitions.

 

Adjusted EBITDA increased by +6.1% to €71.0m (2019: €67.0m) representing an Adjusted EBITDA margin of 20.8% (2019: 21.4%). On an underlying basis, Adjusted EBITDA was up +4.6% at €68.9m (2019: €65.9m), resulting in an underlying Adjusted EBITDA margin of 21.2% (2019: 21.7%).

 

Operating profit before exceptional items was €57.8m, an increase of +6.0% versus 2019 (€54.5m). Underlying operating profit before exceptional items increased by +3.3% to €57.0m (2019: €55.2m).

 

Exceptional items

We have had five exceptional items in the year, totalling a net €23.0m (including tax), which were primarily non-cash related.

 

As reported at the half year, there was a non-cash impairment expense of €14.2m against the carrying value of the investment in our Irish whiskey venture, Quintessential Brands Irish Whiskey Limited ("QBIWL").The second was a non-cash credit of €1.5m relating to the net overall release in provisions for contingent consideration in respect of past acquisitions. This predominantly related to the investment in QBIWL (€1.8m), as most of the metrics for payment are unlikely to be met as a result of the impact of COVID-19 on sales and the closure of the visitor centre at the Dublin distillery. The third was an expense of €1.3m relating to the write-off of advisory and legal costs incurred in pursuit of the Group's mergers and acquisitions strategy. Work in this area had to be curtailed as a result of the impact of the COVID-19 pandemic.

 

Then, in the second half of the year, the carrying value of our traditional Italian brands incurred a non-cash impairment charge of €9.6m, with a related deferred tax credit of €1.1m. This reflected both the considerable impact of the pandemic on the near-term prospects for the Italian market as well as the corresponding increase in discount rates used in the impairment review. Finally, there was also €0.6m in restructuring charges as a result of management changes. Further details are set out in note 6 of the attached Consolidated Financial Statements.

 

Finance costs

Net finance costs were €3.8m (2019: €4.5m), including €0.5m (2019: €0.6m) of interest payable on lease liabilities following the adoption and implementation of IFRS 16 "Leases". The underlying decrease was primarily due to the reduction of bank facility-drawings.

 

Taxation

The income tax expense for the year was €10.3m and included an exceptional tax credit of €1.1m recognised in respect of the Italian brands impairment charge. The underlying income tax expense (total income tax expense excluding exceptional items) was €11.4m (2019: €10.9m).  As detailed in note 9 of the Consolidated Financial Statements, the income tax expense reflects a number of factors including the tax expense for the current period, changes in provisions for taxation relating to prior years, and movements in deferred tax. The underlying effective tax rate (excluding exceptional and prior year items) of the Group was 22.2% (2019: 25.3%). The underlying decrease is principally due to a greater proportion of taxable profits coming from Poland and Czech, where the tax rates are 19%.

 

Group tax provisions totalled €3.5m at 30 September 2020, a decrease of €0.8m from 30 September 2019.

The decrease primarily relates to the release of provisions in the Czech Republic in respect of the 2012-2017 tax years, based on the length of time that has elapsed with no challenge or assessments raised by the tax authorities. As set out in the Principal Risks, the Group is exposed to a number of tax risks in the countries in which it operates. There have been a number of developments with respect to the Group's unsettled tax years in several countries. This includes Poland, where we continued with the appeal process against the €4.5m assessment issued by the Polish tax authorities in respect of our 2013 Corporate Income Tax return and historical tax positions. In February 2020 the administrative court of first instance upheld the assessment and we lodged a final appeal, to the Supreme Administrative Court, in May 2020. In respect of intellectual property restructuring, representing €3.7m of the total assessment, our view remains unchanged and, on the basis of all the available evidence and professional opinions, we consider that the position adopted by the Group will ultimately prevail. Therefore, we continue to recognise a receivable against the assessed taxes which, in accordance with the local requirements, have been paid in full to the tax authorities to facilitate the appeal. No receivable has been recognised in respect of the remaining €0.8m relating to the deductibility of the intra-group management recharges. Audits have also commenced during the year into aspects of the 2014 and 2015 tax years, but we have yet to receive any assessments. Further details are set out in note 9 of the Consolidated Financial Statements.

 

Earnings per share

The basic earnings per share for the year was 9.83 €cents per share (2019: 14.33 €cents per share). Adjusted basic earnings per share, removing the impact of exceptional items, was 21.42 €cents per share (2019: 19.75 €cents per share).

 

Cash flow and working capital

The Group continues to generate strong cash flow from operating activities. Using a measure by which we judge our underlying operational cash flow, the Group generated free cash flow of €79.6m (2019: €61.3m). This represents a strong conversion rate from Adjusted EBITDA of 112.1% (2019: 91.5%), and reflects an increased focus on managing working capital levels during the pandemic, particularly Trade Receivables.

 

The Lublin distillery project has been initiated, with planning work and permit applications underway. Capital expenditure on the project during the year has been minimal. The plant is expected to be operational by the end of 2022. The Italian bottling plant project is at an earlier stage of planning. The OneSAP project is around its mid-way stage, and it has proceeded largely to plan notwithstanding the pandemic. The new standardised technology platform is expected to be operational during the first half of the year-ending 30 September 2022. 

 

Dividend and reserves

The Board has proposed a final dividend to shareholders which represents a step-up interpretation of our progressive dividend policy. The Board proposes a final dividend of 6.78 €cents per share (2019: €6.31€cents per share), an increase of +7.4%. When combined with the interim dividend of 2.77 €cents per share paid in June 2020 (2.63 €cents interim dividend paid in June 2019), this totals 9.55 €cents per share for the year (2019: 8.94 €cents per share), an increase of +6.8% on the prior year total.

 

Given that we have not been able to complete any meaningful M&A projects in the year due to the disruption resulting from COVID-19, and the ongoing pandemic means that we are unlikely to complete a meaningful acquisition in the near-term, the Board has proposed an additional special dividend of 11.00 €cents per share payable alongside the final dividend.

 

Net debt and maturity profile

The Group's Revolving Credit Facility ("RCF"), which was taken out in 2015, expires in November 2022. Debt can be drawn and repaid at the Group's discretion without penalty or charge. At 30 September 2020, €14.0m of the RCF is utilised to back excise duty guarantees in Italy and Germany. We also retain a factoring facility capability of €70.0m, which remains unused.

 

The continued strong cash flow during the year resulted in Net Debt (now including IFRS 16 adjustments) of €22.7m at 30 September 2020, a decrease of €32.8m from 30 September 2019. Leverage has also reduced from 0.83x (as at 30 September 2019) to 0.32x reflecting the significantly increased Adjusted EBITDA and reduced borrowings.

 

Our financing facility covenants are: Net Debt/EBITDA 3.5x maximum and interest cover 4.0x minimum. We currently operate, and expect to remain, comfortably within these levels and to retain significant unused bank facilities. Our relatively low leverage, combined with the significant headroom in our bank facilities, leaves us well-placed to finance our strategic aspirations.

 

Foreign exchange

The Group remains exposed to the impact of foreign currency exchange movements, with the major trading currencies continuing to be the Polish złoty and the Czech koruna. At 30 September 2020, there were no formal hedging instruments in place.

 

A net foreign currency exchange transactional loss of €0.6m was reported within the Adjusted EBITDA for the year. This has arisen on the weakening of the Polish złoty and the Czech koruna versus the Euro.

 

Brexit

As reported previously, the Group does not expect a material impact from the UK's forthcoming exit from the European Union irrespective of the nature of the final arrangement with the EU. As the Group reports in euros and the main trading currencies are the Polish złoty and the Czech koruna, the volatility of pound sterling is not a material factor for our operations. Nevertheless, the implications of Brexit will continue to be monitored as will all the principal risks that the Group faces.

 

Equity structure

There has been no change to the equity structure of the business in the year to 30 September 2020. The issued share capital remains at 200 million Ordinary shares with a nominal value of £0.10 each.

 

 

Directors' responsibility statement

Each of the Directors, whose names and functions are listed below, confirms that:

To the best of their knowledge, the consolidated financial statements and the Company financial statements, which have been prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company on a consolidated and individual basis; and to the best of their knowledge, the announcement includes a fair summary of the development and performance of the business and the position of the Company on a consolidated and individual basis, together with a description of the principal risks and uncertainties that it faces.

 

Directors

 

David Maloney, Non-Executive Chairman

 

Mirek Stachowicz, Chief Executive Officer

 

Paul Bal, Chief Financial Officer

 

John Nicolson, Senior Independent Non-Executive Director

 

Mike Butterworth, Independent Non-Executive Director

 

Tomasz Blawat, Independent Non-Executive Director

 

Diego Bevilacqua, Independent Non-Executive Director

 

Kate Allum, Independent Non-Executive Director

 

 

Principal risks

Stock Spirits Group believes the following to be the principal risks facing its business and the steps we take to manage and mitigate these risks. Risks are identified and assessed through a combined bottom-up and top-down approach. If any of these risks occur, Stock Spirits' business, financial condition and performance might suffer and the trading price and/or liquidity of the shares may decline. Not all of these risks are within our control and this list cannot be considered to be exhaustive, as other risks and uncertainties may emerge in a changing business environment.

 

Clearly the impact of COVID-19 remains a major uncertainty facing almost every business. The impact on our key markets of Poland and the Czech Republic has not been material to date, however, it is almost impossible to predict the future impact, given the uncertain duration of the pandemic and the resulting longer-term macro-economic impact. At this point in time, we are assuming that when the outbreak is contained, whether through the deployment of an effective vaccine or otherwise, and restrictions are lifted, our markets will return largely to normal. However, the overall impact on the economies and consumer spending in our markets and the duration of that impact remains highly uncertain.  There may be some longer lasting changes within the trade channels e.g. some bars, restaurants and other outlets may decide not to re-open when the pandemic ends. International travel is likely to continue to be subdued, impacting economies that depend on a high level of tourism such as Italy, even after allowing for a compensating increase in domestic tourism. Online purchasing could become more significant for all categories, including alcohol. There may also be other longer lasting changes in consumer behaviours, but it is not yet clear whether that might entail a reduction in social gatherings, or an increase. Taking all these uncertain factors into account, we are currently assuming that underlying consumer demand and trends will not be significantly altered post COVID-19 in a way which would materially impact our Group as a whole. This is broadly the position we have observed over the preceding 6 months since COVID-19 became widespread across our markets, during which our businesses demonstrated strong resilience, although firm conclusions about the future cannot yet be drawn. Based on that, the Board considers the principal risks and uncertainties for the Group are:

 

(Note: References to changes in 2020 mean changes in the 12 month period ended 30 September 2020).

 

Risk description and impact	Change in 2020	How we manage and mitigate	Rating
Risk 1 Economic and political change	Increased		High
·   Results are affected by overall economic conditions and consumer confidence in key geographic markets in Central and Eastern European markets and Italy where economic uncertainty and political instability is considered to be higher than other European countries.	·      We have not been significantly impacted by major economic or political changes in our key markets during 2020.	·   We monitor and analyse economic indicators and consumer consumption trends which, in turn, influence our product portfolio, new product development and route to market. ·      Further diversification of our geographic footprint through strategic M&A will also mitigate the risk of exposure to less stable political environments.
Risk 2 Taxes	Increased		High
·   Increases in taxes, particularly excise duty rates and VAT, could adversely affect demand for the Group's products. Demand for the Group's products is particularly sensitive to fluctuations in excise taxes, since excise taxes generally constitute the largest component of the sales price of spirits. ·   The Group may be exposed to tax liabilities resulting from tax audits. ·   Changes in tax laws and related interpretations and increased enforcement actions and penalties may increase the cost of doing business. ·   Certain tax positions taken by the Group are based on industry practice and external tax advice and/or involve a significant degree of judgement.	·   Changes to excise duty on spirits by 13% in the Czech Republic and 10% in Poland occurred from 1 January 2020. The strength of our brands and market position, combined with careful planning, resulted in minimal impact. ·   Looking ahead, a small formats tax will be implemented in Poland from 1 January 2021. See note 9 (Income Taxes) in the notes to the Consolidated Financial Statements for details of the ongoing tax inspections, assessments and disputes and other tax matters.	·   Membership of local spirits trade associations, to engage with tax authorities and government representatives and, where appropriate, provide informed input to the unintended consequences of excise increases e.g. growth of illicit alcohol and potential harm to consumers. ·   Professional tax advice and regular audits of our own tax policies, processes, documentation and compliance. ·   Appropriate provisions where tax liabilities appear probable. ·   New product development focused on lower alcohol strength, resulting in lower excise duty impact as well as offering consumers greater choice. ·   Legal challenges
Risk 3 Laws and regulations	Increased		High
·   The Group is subject to extensive laws and regulations limiting advertising, promotions and access to its products, as well as laws and regulations relating to its operations, such as anti-trust, anti-bribery, data protection, health, safety and environmental laws. These regulations and any changes to them could limit the Group's business activities or increase costs.	·   Increased intensity of regulatory proposals related to both alcohol in general and spirits in particular. In Czech Republic, a proposal to ban TV and digital advertising of alcohol has been proposed. ·   In Poland, the Competition Protection Authority (UOKiK) increased enforcement action to counteract delay in payment of creditors.	·    The key countries that we currently operate in are part of the European Union (EU) and, therefore, are subject to relatively consistent EU regulation, although the EU is taking action against Poland in relation to judicial independence, the functioning of its legislative and electoral system and the protection of fundamental rights.  ·    Monitoring legislative proposals and ensuring appropriate representation of our interests through local spirits trade associations and where appropriate, direct contact with government departments. ·    Clear processes and controls to monitor compliance with laws and regulations. ·    We operate detailed anti-bribery, anti-trust and data protection compliance policies and processes. ·    Regular update training is conducted across the business and we undertake regular reviews and independent internal audits to assess the adequacy and effectiveness of our policies and processes.
Risk 4 Marketplace and competition	No change		Medium
·   Highly competitive markets may result in pressure on prices and loss of market share. This has been particularly evident in Poland historically. ·   Changes in the Group's distribution channels may also have an adverse effect on profitability. ·   A significant portion of the Group's revenue is derived from a small number of customers. The Group may not be able to maintain its relationships with these customers or renegotiate agreements on favourable terms, or may be unable to collect payments from some customers, which would lead to an impact in its financial condition. ·   The Group is also dependent on a few key products in a limited number of markets which contribute a significant portion of its revenue and/or profits.	·   In Poland and the Czech Republic we continued to respond to price reductions by competitors and demonstrated our resilience by growing our market share in key categories without a significant impact on our profit margins ·   Ongoing tight control over costs, including   consolidation of our Czech and Slovakia businesses and central operations roles, resulting in the reduction of two senior manager positions.	·   The Group has mechanisms and strategies in place to mitigate the damage of profit erosion but there is no assurance they will work in the economies and competitive environments in which we operate. ·   We constantly review our distribution channels and our customer relationships. We understand the changing nature of the trade channels and customer positions within those channels. We trade across all channels and actively manage our profit mix by both channel and customer. ·   We have well-established credit control policies and procedures and we put in place trade receivables insurance where it is cost effective to do so.
Risk 5 Strategic transactions	No change		Medium
·   Key objectives of the Group are: (i) the development of new products and variants; (ii) expansion through the acquisition of additional businesses; and (iii) distribution agreements with world-class brand partners. Unsuccessful launches, or failure by the Group to fulfil its expansion plans or integrate completed acquisitions, or to maintain and develop its third-party brand relationships could have a material adverse effect on the Group's growth potential and performance.	·   Our new product development process continues to deliver successful innovations such as Božkov Republica rum in the Czech Republic. ·   During 2020, we fully integrated the acquisitions of Distillerie Franciacorta in Italy and Bartida in the Czech Republic completed in 2019.	·   We continue to seek value-accretive acquisition targets and have an experienced management team capable of pursuing and executing transaction opportunities swiftly and diligently; however, the owners of target businesses may have price expectations that are beyond the valuation that we can place on their business. ·   We use detailed criteria aligned with our strategy to evaluate potential M&A targets. ·   High hurdle rates, in excess of our Group WACC rate, are used in M&A valuations. ·   If we are unable to complete meaningful acquisitions, we will consider distributing surplus cash to shareholders. ·   We continue to invest significant resources in our NPD process as well as exploring opportunities to extend and enhance our third-party distribution arrangements.
Risk 6 Consumer preferences	No change		Medium
·   Shifts in consumer preferences or decline in social acceptability of alcohol may lead to a decrease in revenue.	·   Continued general decline in consumption of higher alcohol drinks, particularly by young-adult drinkers. ·   We are responding to the rise in consumer and general awareness of climate change, sustainability and other environment, social and governance (ESG) issues through a comprehensive review of the impact of our business and products and the implementation of action plans to reduce that impact	·   The Group undertakes extensive consumer and route to consumer research and has a track record of successful NPD to constantly meet changing consumer needs. ·   We have developed a range of lower alcohol products and feel confident that we have the expertise to continue to develop products that meet and satisfy consumer needs.
Risk 7 Disruption to operations or systems	No change		Medium
·   The Group's operating results may be adversely affected by disruption to its production and storage facilities, in particular its main production facilities in Poland and the Czech Republic, or by a breakdown of its information or management control systems.	·   Ongoing IT project to upgrade to a single version of SAP S4/Hana, to improve access to consistent information across the Group, deliver analytical reports and insights and further automate controls and standardise processes across the Group. ·   We retained our Cyber Essentials certification and implemented insurance cover specifically for cyber risks.	·   Insurance cover to protect the business in the event of a production disruption or other business interruption. ·   Our two primary bottling sites are capable of bottling all of our core SKUs. ·   Business Continuity and Disaster Recovery policies. ·   Our information and management control systems are subject to internal audit following a risk-based methodology. ·   Independent specialists assess and test security and resilience of our network against hacking and other cyber threats.
Risk 8 Supply of raw materials	No change		Medium
·   Commodity price changes may increase cost of raw and packaging materials. ·   The Group may not be able to pass on increases in costs to customers or adjustments may be delayed and may not fully off-set extra costs or cause a decline in sales. ·   Extreme weather conditions and climate change may damage supplies of key raw materials such as grain, causing extreme price spikes. ·   Energy price fluctuations impact us both directly and indirectly through our supply chain. ·   Labour costs may also rise ahead of our ability to pass through such costs.	·   European and global grain prices were adversely affected by lower than expected harvests and higher than forecasted demand from Asia. Raw and rectified alcohol market prices increased double digit versus last year. ·   However, our cost optimisation initiatives in procurement, including more centralised purchasing and strategic partnerships with key suppliers, have provided relative price stability and reliability of supply and ensured that overall cost of goods remains at manageable levels comparable with the prior year.	·   We closely monitor the key procurement markets to optimise our procurement strategies. ·   Where possible and appropriate, the Group will negotiate term contracts for the supply of core raw materials and services on competitive terms to manage pricing fluctuations.
Risk 9 Exchange rates	No change		Medium
·   Group revenue, assets and liabilities are primarily in Polish złoty and Czech koruna while results are reported in euros and the share price is in pounds sterling. Additionally, the Group's financial covenants are tested in euros. ·   Historically, volatility between the euro, the złoty and the koruna has been low, but we cannot predict future volatility.	·   Recent world trade volatility, including tariffs imposed by the US, EU and China together with the strength of the US dollar and Brexit, have led to increased currency fluctuations globally but there has been no significant impact on the Group.	·   The Group aims to hedge transaction risk by matching cash flows, assets and liabilities through normal commercial business arrangements where possible. For example, all debt is currently drawn in local currency by market. ·   We monitor currency exposure as an integral part of our monthly review process and, where appropriate, implement hedging instruments. ·   Further diversification of our geographic footprint through strategic M&A will also mitigate exchange rate risk.
NEW Risk 10 - Funding and Liquidity	Increase		Medium
·   Refinancing requirements or investment plans could subject the Group to unexpected needs for liquidity, which may require the Group to increase its levels of indebtedness. ·   Access to financing in the longer-term depends on a variety of factors outside the Group's control, including capital and credit market conditions. Higher interest rates and more stringent borrowing requirements could increase the Group's financing charges and reduce profitability.	·   Liquidity has been challenging for some customers due to COVID-19. Credit markets have 'hardened' and become more expensive, also as a result of the COVID-19 pandemic.	·   The Group maintains a strong focus on cash, our future requirements for funding and the overall external market for financing. We undertake regular and detailed reviews of both short-term and longer-term liquidity requirements by market, including our growth ambitions. ·   We are confident that we have the appropriate processes and relationships in place to respond to any refinancing or liquidity needs and that we have placed ourselves in the best position to access funding at appropriate commercial rates in the longer term.
Risk 11 Talent	No change		Low
·   Loss of any member of the senior management team could have an adverse effect on the Group's operations. ·   The Group may also not be successful in attracting and retaining such individuals in the future, particularly due to low unemployment and higher wage inflation in Poland and the Czech Republic.	·   During the year we continued to strengthen our management team with the appointment of a new Managing Director in our enlarged Italian business, following the acquisition of Distillerie Franciacorta. ·   The results of our annual Employee Engagement Survey showed continued improvements and action plans arising from those results continue to be implemented.	·   Competitive remuneration policy to retain, motivate and attract key individuals. ·   Leadership framework to guide talent management and succession planning process to mitigate risk of losing key personnel. ·   Annual Employee Engagement Survey enables us to assess employee engagement levels across the Group and act upon the feedback in a systematic way.

 

 

 

 

 

Consolidated Income Statement for the year ended 30 September 2020
		Year to 30 September		Year to 30 September
		2020		2019 Restated*
	Notes	€000		€000
Revenue	3	340,988		312,419
Cost of goods sold		(182,757)		(164,600)
Gross profit		158,231		147,819
Selling expenses		(65,922)		(60,987)
Other operating expenses		(33,409)		(31,319)
Impairment loss on trade and other receivables		(902)		(430)
Share of loss of equity-accounted investees, net of tax	11	(165)		(536)
Operating profit before exceptional items		57,833		54,547
Exceptional income	6	1,510		3,766
Exceptional expenses	6	(25,700)		(15,459)
Operating profit		33,643		42,854
Finance income	7	179		312
Finance costs	7	(3,970)		(4,799)
Profit before tax		29,852		38,367
Income tax expense	9	(11,436)		(10,868)
Exceptional tax credit	6, 9	1,142		948
Total income tax expense		(10,294)		(9,920)
Profit for the year		19,558		28,447
Attributable to:
Equity holders of the Parent		19,558		28,447
Earnings per share (€cents) attributable to equity holders of the Parent
Basic	10	9.83		14.33
Diluted	10	9.73		14.24

 

*Restated for the adoption of IFRS 16, as explained in note 15.