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Pernod Ricard reports excellent' results

Published:  23 July, 2008

France's Pernod Ricard has increased its full-year sales target after exceeding both its own and analysts' forecasts in the half-year to the end of December, in which its organic sales rose 9.7%, sending the shares to a record level in Paris.

The French company now expects full-year revenues to the end of June to grow more than 6% compared with a previous range of between 4% and 6%.

Our excellent 2006/07 first-half net sales testify to the strength of our global network and to the quality of our portfolio,' chairman Patrick Ricard said. Managing director Pierre Pringuet said the figures were extremely good' and showed that the business was robust', especially as sales had increased their growth rate in the final three months of 2006.

Pernod Ricard, he said, has the most complete portfolio in the industry'.

The sales growth was led by the Americas region and new markets such as Asia and Russia, and was helped by its policy of selling more expensive vintage Cognacs, whiskies and wines.

Volumes of the 15 key brands, including Chivas Regal scotch (which passed the 500,000 case mark in 2006), Stolichnaya vodka, Martell Cognac, Havana Club rum and Beefeater gin, rose 9% but grew 14% in value, reflecting increased margins and a continuing drive to sell higher-quality spirits.

While spirits sales enjoyed organic growth of 15.6.% in the six months under review, the company had a much more difficult time with wines, which grew by just 0.9%, largely due to difficulties in the UK market. Jacob's Creek, Pringuet said, had performed well in most markets but was suffering high pressure on UK prices, especially because of the glut of Australian wines, which he expects to be eradicated after this year's sharp frosts. The Montana range from New Zealand, he said was a real growth driver'.

Pringuet also confirmed that Pernod Ricard was in ongoing negotiations' to buy the Stolichnaya vodka brand and would consider a move for Absolut vodka when the Swedish government decided to privatise Vin & Sprit, the brand owner. That is expected later this year.