Pernod profit boost falls flat with investors

8th March 2007, Comments 0 comments

PARIS, March 8, 2007 (AFP) - French drink empire Pernod Ricard, now including Allied Domecq, said on Thursday that six-month net underlying profit rose by 18.0 percent with a boost from top brands worldwide.

PARIS, March 8, 2007 (AFP) - French drink empire Pernod Ricard, now including Allied Domecq, said on Thursday that six-month net underlying profit rose by 18.0 percent with a boost from top brands worldwide.

But the results were seen as disappointing and Pernod shares fell by 4.36 percent to 149.79 euros in morning trading.

Pernod Ricard said that net current profit, which excludes some exceptional items, rose by 18.0 percent to 529 million euros in the first half of its financial year for 2006-2007, driven by performance by its top brands and by economies of scale arising from the acquisition of Allied Domecq.

But brokers Oddo Securities and Raymond James said that analysts overall had expected the group to report a figure of 550 million euros.

Company president Patrick Ricard said that these results, and "very good" activity in the first two months of the year, "lead us to expect growth of net current profit after minority interests of about 20.0 percent for the whole of 2006-2007."

This excluded the effects of foreign exchange variations and changes in market conditions.

In the first half, net profit was 500 million euros, an increase of 2.4 percent from the equivalent figure in 2005.

This included non-recurrent items arising from the integration of Allied Domecq, finance director Emmanuel Babeau told AFP.

The performance "does not reflect the trend of how our profitability is evolving".

Performance in the first half "illustrates the strength and efficiency both of the strategy and of the business model."

Babeau said that the company had benefited from a strong presence in emerging markets.

He also said that margins and profitability had increased because sales of top branded products had accelerated. The group's portfolio includes Chivas, Ballantine's, Royal Salute, The Glenlivet, Martell, and Perrier-Jouet Belle Epoque.

The group noted that it was highly international, generating 53.0 percent of profits in regions showing strong growth, despite the fall of the dollar

Babeau said that he was "confident" about prospects in the second half of the year which had begun "on a very good note".

Celebrations for the Chinese New Year had given a big boost to sales in Asia of products under luxury brands.

He also said that the company was continuing to talk to the SPI group, controlled by Russian interests, about possibly buying the vodka brand "Stolichnaya."

Copyright AFP

Subject: French news

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