FRANCE: Laurent-Perrier H1 profits plummet

Champagne house Laurent-Perrier has reported an 85% drop in net profits for the first half of its fiscal year, reflecting a tough time for Champagne in the global economic downturn.

Net profits slid to EUR1.73m (US$2.6m) for the six months to the end of September, compared to EUR11.13m in the same period of 2008, Laurent-Perrier said today (2 December).

Current operating profits fell 62% to EUR9.1m, while net sales slipped by 23% to EUR65.9m, against EUR85.2m last year.

Many Champagne houses have been hit hard by the global economic downturn, which has significantly reduced consumer demand for the iconic French fizz.

Laurent-Perrier's share price fell by nearly 3% to EUR52.1 on the Euronext Paris Stock Exchange today.

"Analysis of the second quarter performance shows that the group's volume sales, driven by the French market in particular, advanced faster than the market average," said group chairman Stéphane Tsassis.

"While we are seeing encouraging signs as we move into the third quarter, we are convinced that the efforts deployed to take us through this crisis will help us achieve our mid-term profitability targets, as we will head into the next growth phase with an optimised cost structure and production base," he said.

Laurent-Perrier net debt rose by EUR44.7m to represent 157% of shareholders' equity by the end of September, against 136% at the beginning of the half-year.

Negative cash flow was EUR45m, boosted by EUR4m on the year before by the disposal of Chateau Malakoff and cost controls.

The firm said it will continue to focus on premium brands.

On costs, it expects to benefit from "staggering its payments for the 2009 harvest through to November 2010, and from a significant reduction in investment, as the large-scale programme to renovate and extend facilities launched in 2006 has now concluded".