Remy Martin

Top story 

French spirits player Rémy Cointreau has upgraded its full year guidance after first half revenues jumped 52% driven by the global recovery from Covid. 

The group saw sales of €645.3m in the first half, up 52% on an organic basis and 49.8% on a reported basis. 

Sales were up 26.9% on an organic basis relative to the pre-pandemic first half of 2019-20, reflecting continued “excellent momentum” in China and the United States as well as a strong recovery in Europe. 

First-half sales at the Cognac division were up 55.2% on an organic basis, including volume growth of 35% and a 20.2% increase from price/mix effects thanks to the growing contribution from mid-range products and worldwide price rises implemented in April 2021. 

First-half sales at the Liqueurs & Spirits division were up 46.9% on an organic basis, with all regions contributing, including in particular the key markets of the United States where the House of Cointreau remains “hugely popular”. 

Current operating profit was €212.9m, which represented exceptional growth of 104.5% on an organic basis and 100.4% on a reported basis. 

Current operating margin rose significantly, climbing 8.3 percentage points to an all-time high of 33%. 

Eric Vallat, Rémy Cointreau’s CEO, commented: “It has been an amazing semester for Rémy Cointreau, reflecting our market share gains and the solid progress made on our strategic priorities. These results will reinforce our ability to become the worldwide leader in exceptional spirits.  

“They will enable us to fuel the growth of tomorrow, by accelerating our investments behind our brands, our capabilities, and our plan #APlanetOfException against global warming. We should be proud, but also humble as we operate in a resilient business. Our great brands built over centuries are well positioned to benefit from the upgrading trends worldwide.” 

As a result of the strong first half performance the group upgraded full year forecasts and is now targeting “very strong” organic growth in current operating profit. 

However, the group plans to step up marketing and communication spend in the second half to support its brands and manage its strategic inventory in the fourth quarter, and given the high base of comparison in the second half, organic growth in current operating profit will be driven solely by the outstanding growth seen in the first half.  

Shares have jumped 9.7% to €205 so far this morning to set a new all-time high for the company.

Morning update 

Payment technology firm PayPoint has posted a recovery in first half sales and profits as it benefitted from the return of shoppers post-Covid. 

Revenue from continuing operations in the half year to 30 September increased by £9.5m to £70.2m, with net revenue from continuing operations increased by £9.7m, or 20.9%,  to £56.1m. 

PayPoint said this was driven by net revenues generated by Handepay and Merchant Rentals card payments and leasing revenue. 

There was also continued growth across service fees, parcels and cash through to digital (e-money), partially offset by decreases in cash bill payments and top-ups primarily due to the continued shift in consumer behaviour through Covid-19 and ongoing structural decline of the prepaid mobile sector. 

Shopping divisional net revenue increased by 51% to £29.3 million, driven by the net revenue contribution from the Handepay/Merchant Rentals card payments businesses of £9.8m and from the roll out of PayPoint One to additional retailer sites. 

E-commerce divisional net revenue increased by 39% to £2.1m and transactions increased by 27.6% through its e-commerce technology platform, Collect+. 

Profit before tax from continuing operations increased by £5.1m to £21.9m. 

CEO Nick Wiles commented: “The Group has continued to perform well in the first half of the year, with further progress made on the numerous growth opportunities across our expanded business. We have delivered this positive performance against the backdrop of continued uncertainty in our energy markets and its impact on our clients, as well as responding in a number of areas of the business to the impact of changing consumer behaviours as Covid-19 restrictions have eased. 

“Across our expanded universe of over 60,000 SME and retailer partner locations, we continue to be well-placed to support our partners in response to the wider trends that have accelerated through the pandemic, including the continued shift from cash to digital payments, the growing demand for online shopping fulfilment and the increase in shopping local. Overall, the board’s expectations for the full year remain unchanged.” 

Elsewhere, pub group Mitchells & Butlers continued to suffer from Covid lockdowns in its year to 25 September, but said it has returned to profitability since restrictions were lifted. 

It posted total annual revenues to £1.07bn, down from £1.48bn in the previous financial year due to restrictions on trading in response to Covid-19.   

Across the year like-for-like sales declined by 9.6% with food sales up by 2.5%, supported by reduced levels of VAT, and drink sales down by 21.6%.   

Against the pre-pandemic period of 2019 drinks volumes were in decline of 28.5% reflecting the restrictions on group sizes and the slower recovery of wet led brands particularly in larger city centres and outside of the higher energy younger pub and bar market.   

Food volumes, across the year, were in decline of 25.1% with the increase in average spend per head reflecting the increasingly strong performance of premium offers.    

For the eight weeks since the period end, like-for-like sales against 2019 have increased by 2.7%, comprising an increase in like-for-like food sales of 9.5% and a decrease of like-for-like drink salesa of 4.8%.   

Volumes remain in decline of between 10% to 15%, with sales being driven by increases in spend per head and reduced VAT on food and non-alcoholic drink.  . 

The significant impact of Covid-19 closures and restrictions resulted in an adjusted operating profit of £29m compared to £99m in the previous year. 

Support to the group itself continued in the form of a holiday from business rates, which was worth £75m in the period, and a reduction in the rate of VAT to 5% on non-alcoholic sales throughout the year which was worth £81m. 

Total loss before tax fell to £42m from £123m in the previous financial year. 

CEO Phil Urban commented: “Despite the inevitable challenges faced by our business over the past year we are now well positioned to regain the momentum previously built as we come out of the pandemic.  

“The trading environment remains challenging and cost headwinds continue to put pressure on the sector.  However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges.   

“Demand for our well-loved brands has been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions have been lifted, and we are confident in our ability to continue our recovery as a market leading operator.” 

On the markets this morning, the FTSE 100 is up another 0.1% to 7,294.5pts.

Early risers include McColl’s Retail Group, up 7.9% to 13p, Nichols, up 5.3% to 1,389.8p and Deliveroo, up 3.7% to 319.8p.

Fallers include Glanbia, down 6.2% to €12.20, Imperial Brands, down 3% to 1,568p and Finsbury Food Group, down 2% to 99.2p.

Yesterday in the City 

The FTSE 100 ended yesterday up 0.3% to 7,286.3pts, rising for its third consecutive day. 

Risers included online and delivery specialists, with Pasley Box up 2.2% to 46.5p, Just Eat up 1.8% to 5,162p, Deliveroo up 1.8% to 308.3p and Naked Wines up 1.8% to 636p. 

Other risers included Glanbia, up 4% to €13.00, Hotel Chocolat, up 3.7% to 504p, McBride, up 3.6% to 66.3p, Britvic, up 2.5% to 900p and Science in Sport, up 2.4% to 64.5p. 

Cranswick was amongst the day’s fallers, dropping 5% to 3,488p after announcing its interim results on Tuesday. 

Other fallers included Kerry Group, down 3.9% to €110.85, Pets at Home, down 2.8% to 470p, SSP Group, down 2.1% to 248.6p, FeverTree, down 1.8% to 2,610, THG, down 1.8% to 182.9p and Ocado, down 1.7% to 1,774p.