Investor backs Lark Distilling following CEO’s shock exit

Lark Distilling’s largest shareholder has increased its stake in the company, which is still trading at a discount after managing director Geoff Bainbridge’s shock resignation last week.

Perennial Value Management purchased a further 1,752,567 shares on February 16 to assume a 12.1% stake, having already increased its holding to 9.77% over recent months.

Portfolio manager Andrew Smith told Drinks Adventures that Bainbridge’s departure had not tempered his enthusiasm for the stock.

“Lark was already on the journey to find a new CEO who could take it to the next level, particularly export markets as inventory becomes available,” he said.

“So while the news regarding Geoff last week is an unwelcome distraction, it just brings forward what was already in train and in our mind shouldn’t change the value of the company at all.”

  • Geoff Bainbridge podcast interview: listen here 

Smith said Bainbridge had done a great job repositioning the brand for future success.

“However, his two-year role should be viewed in the context of a 30-year-old company,” he said.

“The reason we like investing in established whisky companies is it is a long-term game, indeed the whisky stays in the barrels longer that Geoff was CEO.

“For a whisky company, the distiller is really the key role. Chris Thomson has done a great job over many years and we expect him to continue doing so.”

Smith said Perennial was attracted to Lark’s $430 million worth of whisky inventory, with its market cap currently below $300 million.

“We look forward to seeing continued progress for Lark, especially post the recent acquisition, which gives them more high quality inventory as well as a cooperage.”

Lark Distilling shares are currently trading at $3.58.

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