Remy Cointreau banks on premium spirits to boost profit
Maker of Remy Martin cognac and Cointreau liqueur also hands investors 20% dividend increase
Cognac is poured into a glass at the Remy Martin distillery in Cognac, southwestern France. Remy Cointreau has posted higher-than-expected annual profit, despite a difficult year in China. Photograph: Regis Duvignau/Reuters
Remy Cointreau has posted higher-than-expected annual profit, despite a difficult year in China, saying it will accelerate a drive to sell higher-priced spirits to boost profit margins, sending its shares up to 8 per cent higher.
The maker of Remy Martin cognac, Cointreau liqueur and Mount Gay rum also handed investors a 20 per cent dividend increase and predicted further growth in current operating profit in its 2015-16 financial year that began on April 1st.
New chief executive and luxury sector specialist Valerie Chapoulaud-Floquet told a news conference Remy Cointreau wanted to become the world leader in top-end spirits.
To achieve that goal, it would focus on selling more products priced at $50 a bottle or more, while investing in newer markets such as Africa, southeast Asia and Latin America at a time of slower growth in China. Remy Cointreau expects the top-end spirits market to contribute 60-65 per cent of sales by 2020 compared with 45 per cent today and drive the current operating margin to 18-20 per cent of sales by 2020, from 16 per cent now.
Remy Cointreau said its operating profit for the year ended March 31st rose 13.5 per cent to €156 million on an organic basis, which excludes foreign exchange moves and any purchases or sales of businesses. – (Reuters)