French spirits group Pernod Ricard announced a 7 per cent rise in 2001 operating profit today and said it would reach its earnings target a year ahead of schedule.
The company, propelled to third from fifth place in the industry by its Seagram buy, gave the outlook while announcing 2001 net and operating profit in line with its forecasts, though its operating result was slightly below the market consensus.
Pernod said volumes of the Seagram liqueur brands, which it acquired after a joint bid with industry leader Diageo in December, slowed in the second half but were in line with its hypotheses when it made its offer for the Canadian firm.
The owner of Jameson's Irish whiskey and Havana Club rum had targeted earnings per share of €6 for the second year of operations with some 17 Seagram brands under its belt. It now expects to reach that aim as of year one.
The company said its year-long wait for anti-trust approval for the Seagram buy slowed sales in some of those labels, prompting it to make conservative forecasts given the need to revitalise marketing teams and reduce overstocking.
To fund the acquisition - Pernod paid €3.65 billion for Seagram brands including Martell cognac and Chivas Regal whisky - the company saw its debt shoot up to €3.695 billion from 874 million in 2000. It plans to shrink its borrowings by selling its own and Seagram's non-core brands.
Pernod shares, which have gained 25 per cent over the past year, reach a record high of €95 last week and yesterday closed slightly weaker at €93.9.