News

UK: Allied shrugs off concerns with profit growth

Most popular

Pernod breaks boundaries with Chinese distillery

New Remy Cointreau CEO - just-drinks thinks

Pernod on its Chinese whisky project - Interview

Chapoulaud-Floquet's Remy legacy - j-d thinks

Let your brand creativity go wild at festivals

MORE
The world's second largest wine and spirits company Allied Domecq Plc reported up beat forecasts and first half profits at the top end of expectations, helping to shrug off concerns after a profit warning in February.

Allied posted underlying pre-tax profits of £256m (US$405m) for the six months to February 28, slightly above forecasts of £240-254m.

Organic volumes in wines and spirit rose 4% and its core eight brands saw volumes up 8%. Total volumes, including acquisitions were up 16%.

Philip Bowman, chief executive, said: "This was an excellent performance delivering brand growth at the high end of our expectations. Strong trading in the US, Asia Pacific and Latin America has enabled us to absorb the negative impact of those items we announced at our AGM in February, namely increased pension costs, foreign exchange translation and the changed buying patterns of wholesalers in Spain.

Although Allied's shares were the biggest riser in the FTSE 100 this morning, some analysts were less convinced, pointing out that the company only achieved results at the top end of expectations downgraded since the February profit warning.

But Bowman said: "The robust strength in the trading performance reflects the strategic choices and investment made in the past three years. The brand portfolio is now better oriented towards more rapidly growing categories such as vodka, rum, cream liqueurs and premium wine. Our brand growth has been driven by our continued commitment to enhance our marketing capabilities including cutting edge innovation.

"Our acquisition strategy over the last three years has greatly enhanced the growth profile of the business through acquisition and partnerships. The integration of Jinro Ballantines in South Korea, Stolichnaya in the US and our premium wine business has helped to grow organic volumes by 4%. Malibu is now fully integrated and performing well ahead of expectations.

The company is still being criticised for its lack of scale compared to rival Diageo and Bowman said in an interview afterwards that Allied continued to have an open mind about linking with a partner. "Clearly we keep an eye on developments," he said.

However, finance director Graham Hetherington was quoted as saying that it was unlikely to buy Australia's Southcorp.

Looking forward Bowman said: "There are significant challenges confronting all businesses operating in today's uncertain environment. However, while there are uncertainties, we believe we are on track to meet current market expectations."


Companies: Allied Domecq, Diageo

Related Content

Annual exports rise again, but Cognac concerns in China return - data

Annual exports rise again, but Cognac concerns in China return - data...

Bellwether AG Barr can show UK soft drinks how to survive sugar tax woes - Analysis

Bellwether AG Barr can show UK soft drinks how to survive sugar tax woes - Analysis...

UK vodka flatlines as gin drives spirits growth - figures

UK vodka flatlines as gin drives spirits growth - figures...

Where can RTD and cider categories find future growth? - Research in Focus

Where can RTD and cider categories find future growth? - Research in Focus...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?