FRANCE: Price rises help lift profits at Rémy Cointreau in H1
Rémy Cointreau has posted a slight lift in operating profit for the first half of its fiscal year.
The French spirits and Champagne group, which last month reported a 4.6% increase in sales in organic terms for the six-month period, said today (25 November) that operating profit for the half-year to the end of September also grew organically, by 4.2% year-on-year to EUR62.5m (US$80.2m). Sales hit EUR365.2m in the period.
Group net profit leapt by 26.7%, the company said, coming in at EUR48.3m.
The company's liqueur & spirits division, which includes the Cointreau, Mount Gay rum and Metaxa brands, struggled in the first-half, posting a 16.9% fall in operating profit, at EUR21.4m. Thanks to Remy Cointreau's policy of introducing price increases in all markets, however, the Champagne unit saw operating profit soar by 414% to EUR2.8m.
Operating profit for the company's Cognacs grew organically by 16.6% to EUR41.8m, thanks to increased marketing investment.
Overall, the period was marked by "improved profitability" in Champagne, the "satisfactory" growth of top-of-the-range Cognacs, as well as "strong sales growth" in emerging markets, such as China and Russia. Developments in more mature markets, such as the UK and Germany, remained satisfactory", Remy noted, although the US was "static" in the second quarter.
The lift in group operating profit was credited in part to a net income of EUR19.4m relating to Remy's exit from the sales, distribution and marketing joint venture Maxxium, scheduled to take place at the end of March next year.
Looking forward, the company said that the level of activity at the year-end as well as the Chinese New Year will remain key for its full-year performance. "In view of the temporary cost overruns generated by the establishment of its distribution network, Rémy Cointreau does not anticipate, at this stage, organic growth in its current operating profit," the company noted.
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