Pernod Ricard profit up 1%

THE world’s second largest drinks company Pernod Ricard made a net profit of €840m, an increase of 1% for the year to end June 2008.

Strong sales of key brands including Chevas Regal and Jameson whiskies, Mumm champagne and Martell brandy boosted turnover across all markets which rose 9% to €6.58bn for the year.

In France the group’s shares fell a hefty 5.83% to €58.38, after the results disappointed analysts.

Patrick Ricard, chairman and chief executive officer of the group was positive about the outcome for the group however.

“2007/08 proved an outstanding year for Pernod Ricard, with in particular sharp growth in sales and profitability and the successful acquisition of Absolut Vodka,” he said.

Despite the more difficult general environment, the strength of the group’s portfolio and of its global commercial network, together with the expected success of Absolut, “should enable us to continue the strong growth of our sales and profits”, he added.

The strong sales growth and increased operating profitability in all regions, with sustained dynamism in emerging markets and continuing strong growth in western markets bode well for the future, he said.

The overall 13% increase in profit from recurring operations was a group highlight, as it led to higher earnings while also helping to lower group debt to €6.1bn compared to €6.5 billion at 30 June 2007.

The acquisition of Vin & Sprit, owner of Absolut Vodka, is regarded as a major step in advancing the group’s global reach.

Continuing strong sales growth in all regions with 22% growth achieved in emerging markets indicated solid underlying demand for its product range, the group said.

Pernod Ricard owns some of the top names in the global drinks industry including Ricard pastis, Ballantine’s, Glenlivet, Havana Club rum, Beefeater gin, Kahlúa and Malibu liqueurs, as well Jacob’s Creek and Montana wines.

In the year under review its top 15 brands achieved growth of 11% while its premium spirits were up 14% with Jameson still the fastest growing whiskey on the global market.

The group has just launched a €70m ad campaign to support the brand internationally.

The new campaign for Jameson was initially launched in Britain, Russia and Spain and will be seen in several other countries before the end of the year.