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Pernod profits beat predictions

By staff reporter, 23-Mar-2006

Related topics: Financial

Pernod Ricard's share price rose steadily after the group's net profits beat several predictions, in its first financial check-up since taking over Allied Domecq.

Pernod's share price rose five per cent to an above-average €157 by Thursday, following the group's 58 per cent rise in net profits to €471m in its first half, which ended 31 December.

Organic growth, excluding Allied Domecq, was much lower. But, Pernod said the total increase showed how its integration of former rival Allied Domecq was going according to plan.

 

The Allied side of the business matched Pernod's original set-up for profitability, the group said, adding that Allied made a 39 per cent contribution to branded sales.

 

Pernod's original brands contributed 40 per cent, thanks to "spectacular" double-digit growth from Chivas, Jameson, The Glenlivet and Martell.

 

The French group, now the world's second biggest wine and spirits firm, saw its best profit growth in the Americas.

 

"The results of this half year highlight the successful internationalisation of Pernod Ricard that now achieves more than 50 per cent of its profits from the high growth regions of Asia and the Americas."

 

Expansion into established and emerging markets is likely to be key if Pernod is to seriously rival the world's biggest alcoholic drinks group, Diageo.

 

The French group appeared optimistic about cost pressures, reporting it had already achieved that 40 per cent of the projected cost savings from the Allied deal. Pernod said last year it expected to save more than €300m per year through the takeover.

 

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