Pernod Ricard reports increase in income

On September 19, the French wine and spirits supplier Pernod Ricard reports first half results that show a strong improvement in the Company's financial performance and also lower levels of debt. Pre-tax profit is up 14.7 per cent to Euro168.6m; net income rose 29.7 per cent to Euro104.7m, free cash flow increased 86.9 per cent to Euro106.7m, and turnover is up 7.4 per cent to Euro2,189m. The Spirits and Wine sector achieved good performances across all brands and regions, with an overall volume growth of 5.2 per cent. The 10 highest contributing brands, representing 70 per cent of profit in this core business, were up 12.4 per cent by volume. Operating profit in this sector was up 16.2 per cent to Euro126m. The Fruit Processing sector has shown a 4 per cent decline in turnover partly due to the disposal of Italcanditi, San Giorgio Flavors and some Agros businesses, and also due to adverse weather conditions that impacted Orangina sales. Nevertheless, operating profit was stable at Euro37m. In the wholesale grocery distribution sector, turnover was up 16 per cent of which organic growth was up 12.6 per cent. Operating profit fell 7 per cent to Euro18m due to the new excise duty system on tobacco in the UK and the impact of foot and mouth regulations on retail businesses. Patrick Ricard, Chairman and Chief Executive Officer, said: "I am very optimistic about the completion of the Seagram deal. Every parameter is on track. Management teams are in place preparing integration, the disposal of Seagram non-core assets is well underway and already ahead of schedule, and the growth of our future brands is very promising. Furthermore I am confident that the proceeds from the early disposal of our non-core activities will contribute to the bettering of our financial structure."​ The group is still awaiting regulatory approval from the US and Canadian authorities for the Seagram transaction.