Results rise for Pernod
turnover on Tuesday and said it should easily reach its target of
10 per cent profit growth over the same period.
French drinks group Pernod Ricard reported a higher-than-forecast jump in first-half turnover on Tuesday and said it should easily reach its target of 10 per cent profit growth over the same period. Pernod, still awaiting U.S. and Canadian regulatory approval for its joint acquisition of Seagram's drinks, said first-half sales rose 7.2 per cent to 2.185 billion euros from 2.038 billion last year. Of that, 7.1 percentage points was internal growth, Pernod said in a statement. Analysts had forecast a rise of between 6.3 and 6.7 per cent to between 2.167 and 2.174 billion euros. The higher than expected figures sent its stock shooting up to a new year high. Pernod confirmed its targets for first-half growth in net and operating profit. It will publish interim results on September 19. "Pernod Ricard has forecast 10 percent profit growth for this same period, and will easily attain that objective," the company said. "It is a very strong set of figures, better than anticipated, and margins are rising stronger than expected overall," said Nigel Davies, beverage sector analyst at JP Morgan Securities. "In the core business, wines and spirits, 12 per cent organic growth in sales is well above what people had expected." Pernod's wines and spirits activities, which includes Clan Campbell and Jameson Irish whiskies, its eponymous pastis brands and Australia's Jacob's Creek wines, saw exceptional 14.5 per cent sales growth in the first quarter as buyers stocked up before an anticipated March tariff rise. Analysts had predicted a slight slowing in the second quarter, but first-half sales still rose a robust 11.7 per cent to 844.6 million euros. Second quarter turnover was boosted particularly by sales of its Ricard pastis label in Spain. Volumes in its 10 key brands grew 12.4 per cent. "Our 10 brands have posted exceptional growth and our aim consists in maintaining this growth pace after the acquisition of the Seagram brands," Chairman Patrick Ricard said. In its non-core fruit preparations branch that includes the Orangina soft drink label Pernod is selling to Britain's Cadbury Schweppes, sales slipped 4.6 per cent to 667.9 million euros due to poor summer weather in France and the sale of some units. Turnover meanwhile at its wholesale division, chiefly its BWG chain in Britain and Ireland which Pernod is also planning to divest, increased 15.6 per cent to 672.8 million. Pernod said the Seagram acquisition was progressing and it expected approval for the acquisition from the U.S. Federal Trade Commission in September. It had been hoping for approval by July. The drinks group is poised for a major reshaping, gearing up to become the world's third largest player in the sector once the Seagram acquisition, carried out jointly with global leader Diageo, gets the green light. Pernod has vowed to sell all non-strategic assets to help cover the $3.15 billion it paid for 39 percent of Seagram. Pernod set a new year high on Wednesday, rising 1.65 per cent to 86.20 euros at the start of trade. It has outperformed DJ Stoxx European food and beverage index by 17 per cent this year.
