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Drinks giant Pernod Ricard has agreed a €2.1bn sustainability loan linked to emissions and water consumption.
The loan, the first sustainability-linked financing the company has taken out, refinances an existing facility expiring in June 2024.
The loan will be linked to two sustainability commitments: a reduction in absolute greenhouse gas emissions (Scopes 1 and 2) on operated sites, and a reduction of water consumption per unit produced at its distilleries.
Pernod said the transaction is illustrative of its “commitment to integrate sustainability into its daily operations and financing strategy”.
The group has previously launched two sustainability-linked bond issues in 2022, linked to these same key performance indicators.
The new credit facility has been committed to by 22 banks. It has an initial April 2028 maturity and includes two one-year extension options.
For this transaction, BNP Paribas acted as co-ordinator and documentation agent. Crédit Agricole CIB acted as ESG co-ordinator.
Vanessa Wright, chief sustainability officer, commented: “As part of our sustainability and responsibility roadmap ‘Good Times from a Good Place’, we’re committed to preserving the world’s natural resources by reducing carbon emissions, water consumption and waste throughout our value chain.
“The Group’s recent sustainability-linked facility is another demonstration of our drive to reduce our environmental footprint and protect the natural ecosystems where we source the ingredients that make our iconic brands.”
Morning update
CBD consumer goods player Cellular Goods has lost £1.8m in the first half as it cuts overheads following the failure of its merger with Cannaray Brands.
Revenue more than doubled in the year to 28 February from a low base, rising to £31k from £13k.
The company attributed the growth to a sales-focused marketing strategy which leveraged last year’s investment in brand awareness, as well as the expansion of product lines and sales channels.
During the period the group expanded its product range with the introduction of three new rejuvenating skincare products in September 2022, while it started shipping to the US from September.
At the same time, the company implemented a major rationalisation programme to reduce its annual cost base by £3.2m, which incurred a one-off charge of £0.57m.
First-half operating loss declined by 24% to £1.8m for February 2023 compared with £2.39m for the corresponding period last year, and by 50% compared with the previous six months (which resulted in a £3.6m loss).
The rationalisation programme coincides with the collapse of its proposed acquisition of Cannaray Brands and Love CBD Health from Cannaray Brands.
The group said: “It became clear to Cellular Goods’ board and senior leadership team that the updated transaction terms were not in the best interests of the company’s shareholders. The negotiations were not able to reach a deal structure and terms that worked for both parties, and as such we decided to terminate discussions.”
“Cellular Goods is continuing to assess strategic opportunities to generate long-term shareholder value and is open to consider proposals which deliver value and accelerate the development of the business.
“Moreover, the company’s expertise across biosynthetic production, which is emerging as a viable commercial-scale production technology for numerous compounds, opens up a number of options across multiple sectors beyond cannabinoids.”
Chairman Darcy Taylor commented: “Despite industry headwinds, we have benefited from a positive sales momentum in the first half that has continued into the second half. In combination with a significant rationalisation of our cost base and cash burn, we have defined a path to drive our brand business forward.
“We are continuing to assess strategic opportunities to deliver long-term shareholder value and will assess each opportunity on its merits. In the meantime, our focus will continue to be to execute the company’s existing business model and position it for long-term growth. With high-quality products, expanding sales channels, and positive responses from our targeted marketing campaigns, the board looks forward to further progress being made for the full year.”
On the markets this morning, the FTSE 100 is up 0.6% to 7,745.3pts.
Risers include McBride, up 3.9% to 33.5p, THG, up 3% to 98.1p and Bakkavor, up 2.5% to 98.4p.
Fallers include Glanbia, down 2.2% to €13.50, Finsbury Food Group, down 1.1% to 94p and Diageo, down 0.6% to 3,664.3p.
Yesterday in the City
The FTSE 100 lost 1.1% yesterday to close at 7,702.6pts.
THG shares fell back 18.1% to 95.2p after media reports questioned the viability of the takeover approach by Apollo Global Management.
Other fallers included Virgin Wines, down 7.7% to 36p following a trading update yesterday, British American Tobacco, down 2.8% to 2,804.5p, Deliveroo, down 2.7% to 107.6p, Imperial Brands, down 2.6% to 1,896.5p, Hilton Food Group, down 2.6% to 705p, Kerry Group, down 2% to €92.05 and Greencore, down 1.8% to 84.4p.
The day’s risers included Hotel Chocolat, up 4.7% to 178p, Glanbia, up 3.5% to €13.80, AG Barr, up 1.5% to 528p, Coca-Cola HBC, up 1.5% to 2,519p, Domino’s Pizza Group, up 1.3% to 305.6p and Cranswick, up 1.2% to 3,234p.
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