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The world’s second largest distiller Pernod Ricard increased its earnings forecast after profits jumped 6.3% for the year, aided by the continued strong growth of Jameson whisky.

Sales of the Irish whisky brand rose 14% as the France-based distiller recorded €8.98bn in organic sales for the 12 months ending June 2018, up 6% on 2017.

Organic profits rose 6.3% to €2.36bn, driven by pricing improvements and work to limit commodity price impacts. Profit growth guidance for its 2019 financial year has therefore been upped from 4%-6% to 5%-7%.

Sales in the fourth quarter rose 5% to €1.92bn, which was broadly consistent with the rest of the year, the company said.

Pernod Ricard described modest growth in Europe, where sales rose 2%, driven by “good momentum” in the UK, eastern Europe and Germany. There were “difficulties” however in France and Spain.

A return to strong growth in India and China drove a 9% improvement in Asian sales.

Alongside Jameson’s, Martell cognac helped drive growth, as it jumped 14%. There were “improving trends in the overall scotch portfolio” as well, it said, rising 3% as the Chivas stable returned to growth, up 5%.

Another of Pernod Ricard’s major brands in the UK, Absolut, achieved growth, rising 2%, but was impacted by decline in the US market.

“FY18 was a very strong year. Consistent strategic implementation has enabled us to deliver a significant improvement in business performance while investing for the future,” said chairman and CEO, Alexandre Ricard.

“Our Sales have accelerated and diversified, and our margins improved. In FY19, in a still uncertain geopolitical and monetary environment, we will continue consistently implementing our strategy.

“Our guidance for FY19 is organic growth in Profit from Recurring Operations between 5% and 7%.”

Last month Pernod Ricard UK CEO Laurent Pillet announced plans to leave his role to lead the spirits giant’s business in Russia and Eastern Europe.

Pillet, who took over Pernod’s UK operations in 2016, will remain in his post until 1 January 2019, when he will be replaced as UK MD by David Haworth, who is currently MD for Pernod in Germany & Western Europe.

The distiller is also to ramp up its Christmas marketing spend, with a 50% higher investment behind its key spirit brands planned for the coming festive season.

It will kick off four above the line campaigns behind Absolut, Jameson, Plymouth Gin and Beefeater Pink from October onwards playing up the drinks’ viability with cocktails.

Morning update

The hot summer weather pushed up food prices in August, as shop prices inflated for the first time in five years.

Prices in shops rose 0.1% this month, breaking a cycle of 63 continuous months of deflation, according to the British Retail Consortium (BRC) and Nielsen shop price index.

Food price inflation rose from 1.6% in July to 1.9% in August. Simultaneously, non-food price deflation continued to subside, easing to 1% from 1.4% last month.

The hot weather which has heavily impacted European farmers, helped to drive up fresh food prices, which rose 1.5% in August, up from 1.2%.

Ambient food prices also continued to increase, up 2.5% in August, from 2.2% in July.

The hot dry weather, particularly in June and July, reduced yields of some foods in the UK, as well as increases in prices of oil and agricultural products in global markets.

“Despite significant increases in costs in the supply chain, this month’s figures show that retailers are keeping price increases faced by consumers to a minimum,” commented Helen Dickinson, chief executive of the BRC.

“However, current inflationary pressures pale in comparison to potential increases in costs retailers will face in the event that we leave the EU without a deal. If that does happen retailers will not be able to shield consumers from price increases.”

Mike Watkins, head of retailer and business insight, Nielsen: “With the recent hot summer weather, shoppers have been visiting food stores more often and purchasing more food and drink, with promotional offers helping to limit the impact of some cost increases coming through the supply chain. So it’s of no surprise that shop price inflation is a little higher this month.”

In the markets today, the FTSE 100 continued its upturn from yesterday’s trading, rising 0.2% to 7,633pts this morning.

Early risers this morning include Wincanton (WIN), up 4.2% to 245.9p, Crawshaw Group (CRAW), up 2.4% to 6.3p, and PZ Cussons (PZC), up 1.1% to 240.8p.

This morning’s early fallers include Ocado Group (OCDO), down 1.6% to 1,053.5p, Treatt (TET), down 1.6% to 470.3p and Science in Sport (SIS), down 1.2% to 68.2p.

Yesterday in the City

The FTSE 100 advanced yesterday, jumping 0.5% to 7,617pts, as strong demand for metal stocks helped to push up the index.

In the US, natural food group Hain Celestial (HAIN) continued its slump, dropping 6% to $26.80, meaning the company has dropped around 35% this year.

The drop came after the supplier announced that results for the quarter ending in September will likely decline as competition continues to grow in the organic food sector.

Convenience store group McColls (MCLS) led the risers, jumping up 5.5% to 135p in yesterday’s trading.

Other risers included, Purecircle Limited (PURE), up 5.1% to 331p, Fevertree Drinks (FEVR), up 3.7% to 3,588p and Tate & Lyle (TATE), up 3.2% to 659.8p.

Yesterday’s fallers included Wincanton (WIN), down 4.1% to 236p, Associated British Foods (ABF), down 3.1% to 2,286p and Premier Foods (PFD), down 2.5% to 42p.