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French spirits group Rémy Cointreau has posted sales growth of 21% in its third quarter as demand for cognac rebounded.
The group reported sales just shy of €1.1bn in the first nine months of its fiscal year, equating to organic growth of +38.1% over the period.
It said strong third-quarter growth of 21.0% on an organic basis was achieved against a high base reflected “continued excellent momentum across all regions”.
Its Cognac division continued to enjoy “buoyant” demand in the third quarter (up +19.4% on an organic basis), with the division’s sales up 38.5% on an organic basis over the first nine months with strong performances in the US and China.
Sales at the Liqueurs & Spirits division also grew strongly, up 39.1% on an organic basis over the first nine months and by 27.3% in the third quarter.
All regions contributed to Rémy Cointreau’s strong third-quarter performance. The Americas region generated strong growth despite a high base, while it saw excellent growth in in China and northern Asia and its EMEA performance confirmed the recovery seen in the first half of the year.
For the full financial year, Rémy Cointreau reiteratesd its confidence in its ability to outperform “the exceptional spirits market” and anticipates strong organic growth in sales, mainly driven by performance in the first half.
Rémy Cointreau is also targeting “very strong” organic growth in its current operating profit, driven by its first half sales rebound.
“In an environment marked by high base of comparison, the Group confirms its intention to meaningfully increase its marketing and communication spend in the second half to support its brands through the recovery and boost their medium-term growth potential,” it stated.
Rémy Cointreau also reaffirmed its intention to manage its strategic inventory in the fourth quarter.
Consequently, Rémy Cointreau expects to see an organic improvement in its current operating margin.
The company’s shares have fallen by 2.5% today to €187.10, but remain up 26% year-on-year.
Morning update
Pub group Marston’s saw an 8.8% drop in sales over the festive period as the emergence of Omicron hit its trading recovery.
In the 16-week period to 12 January 2022 total like-for-like sales were down 3.9% against pre-Covid levels, reflecting the impact of the Omicron variant and consumer sentiment related to the new variant in the last 8 weeks.
Prior to the emergence of Omicron and subsequent introduction of renewed restrictions, like-for-like sales in the first 8 weeks to 27 November were up 1.3% with encouraging trading momentum.
However, as a result of Government messaging including guidance to work from home and the call to limit social distancing, like-for-like sales were (8.8)% in the last 8 weeks of the period under review. Drinks sales outperformed food sales during the period.
During the five-week period of December like-for-like sales compared to the market outside the M25 were 1% ahead of the market and total sales were 5% ahead.
From a geographic perspective, the Group’s pubs in Wales and Scotland were more significantly impacted than those in England by the tighter restrictions that were enforced during the period.
CEO Andrew Andrea commented: “Whilst the emergence of the Omicron variant and subsequent Government guidance temporarily impacted consumer sentiment, we remain confident that the strong trading momentum which we were experiencing prior to that will resume.
“We welcome the various plans underway to gradually ease trading restrictions in Scotland and Wales. These, together with the reduction in the required self-isolation period and anticipation of an imminent end to the work from home directive, should enable some semblance of normalised trading patterns to return. Indeed, there is growing evidence over the most recent of weeks of the New Year that consumer confidence is rebuilding, and guests are returning to our pubs in greater numbers, which is encouraging.
“Importantly, Marston’s has a well invested, predominantly community pub estate which is well placed to benefit from the pent-up consumer demand which we are confident remains.”
Elsewhere, Cake Box COO Jaswir Singh has bought more than 20,000 shares in the company following its share price collapse yesterday amid the announcement of accounting discrepancies.
The 20,075 shares he bought are worth just over £50k at its newly reduced share price of 250p.
On the markets this morning, the FTSE 100 has recovered 0.5% after yesterday’s dramatic fall to trade at 7,332.9pts.
Risers include McColl’s, up 7.4% to 9.4p, THG, up 2.9% to 124.8p and SSP Group, up 2.1% to 276.3p.
Fallers so far today include British American Tobacco, down 2.1% to 3,117.5p, Imperial Brands, down 2.1% to 1,699.5p and McBride, down 2% to 50p.
Yesterday in the City
The FTSE 100 saw a dramatic 2.6% slump yesterday back to 7,297.1pts as concerns over the political situation between Ukraine and Russia and concerns over global inflation hit international markets.
Heavy fallers in the UK included THG, which plunged 18.7% to 121.3p amid a wider tech sell-off.
Cake Box lost 21.9% of its value to 254p after admitting to accounting discrepancies between its annual results and annual report.
Other fallers included Just Eat Takeaway.com, down 8.1% to 3,591p, Hotel Chocolat, down 8% to 472p, McColl’s, down 7.4% to 8.75p, Naked Wines, down 6.8% to 519p, C&C Group, down 6.2% to 223.6p, Greggs, down 5.4% to 2,487p, Coca-Cola Europacific Partners, down 4.7% to €48.92, Nichols, down 4.7% to 1,315p and Ocado, down 4.7% to 1,358.5p.
The day’s few risers included Unilever, which bounced 7.3% to 3,943.5p on the news that activist investor Nelson Peltz has built a stake in the under pressure consumer giant.
Other risers included British American Tobacco, up 1.5% to 3,184.5p and B&M European Value Retail, up 0.5% to 545.8p.
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