Pernod confident on sales momentum as US, China lift profits By

By Dominique Vidalon

PARIS (Reuters) – French spirits maker Pernod Ricard (PA:) said on Wednesday it was confident its sales momentum would continue this year after a rebound in demand in China and the United States helped it to deliver stronger-than expected annual profits.

Its shares were up 3% by 0830 GMT, making it the biggest gainer on the Paris , which rose 1%.

The owner of Mumm champagne, Absolut vodka and Martell cognac, did not provide specific operating profit guidance for full year 2021/22 that started on July 1, but said its first quarter would be “very dynamic”.

With recurring cash flow at a historical high of 1.745 billion euros at end-June, the group also said it would resume its 500 million euros buyback programme for FY 2021/222.

“We are giving a qualitative guidance for the full year, good sales momentum supported by on-trade recovery, resilient off-trade, dynamism in e-commerce,” Finance Chief Helene de Tissot told Reuters.

However, she said Pernod Ricard remained “very cautious” concerning travel retail prospects over the next 10 months because of ongoing pandemic restrictions.

Over the twelve months to June 30, profit from recurring operations reached 2.423 billion euros ($2.86 billion), an organic rise of 18.3%. This exceeded the company’s guidance for a profit rise of as much as 17%.

“Pernod Ricard FY 2021 reflects a strong recovery despite residual COVID weakness in travel retail and in India,” said Berstein analysts in a note. Sales reached 8.824 billion euros, an organic rise of 9.7%, with sales in the fourth quarter alone jumping 56.5%, from a low base of comparison. In June, the world’s second-biggest spirits group after Britain’s Diageo (LON:), had raised its organic profit growth guidance for 2020/21 to 16% from 10%. And last month, Pernod said a U.S. court ruling that it could claim a refund on spirits exported from the United States would add a further 1% to its organic profit growth.

($1 = 0.8477 euros)

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