While Pernod Ricard may be struggling at home, its Asian and American markets offer healthy bounty

While Pernod Ricard may be struggling at home, its Asian and American markets offer healthy bounty

The troubled landscape for Pernod Ricard in France and Western Europe will continue to be offset by the strength of Asia and the Americas, an analyst has forecast.

The France-based wine and spirits group posted single-digit rises in half-year sales and profits yesterday (14 February), but flagged up difficulties in its domestic market as it cycled tough comparatives. The previous year's H1 numbers included high pre-buying in France ahead of a 14% hike in excise tax on spirits, introduced in January 2012.

In a note released earlier today, however, Nomura has suggested that both Asia and the Americas will provide ongoing growth in the future.

"Asia momentum remains strong with H1 organic revenue up 11% and EBIT up 19%," Nomura said. "In China, H1 revenue growth was in line with Q1 (up 18%) despite some delayed shipments due to Chinese New Year."

With sales in the US up by 9% in the half-year, Nomura said that "underlying momentum is robust".

"The company is still trialling price increases on the Absolut vodka brand in six states, which could be rolled out nationally," it added.

Analysts at Investec echoed the sentiment. "Growth in Asia was ahead of our expectations with China ahead 18%," it said. "Europe, excluding France, at negative 1%, was behind."

Pernod will announce its third-quarter results on 25 April.