Glenlivet whisky owner forecasts profit growth after cheering 'excellent' start to year

Chivas Brothers owner Pernod Ricard, the spirits giant that ranks as Scotland’s second largest whisky producer, is forecasting strong profit growth after cheering an “excellent” quarter.

The owner of Chivas Regal and The Glenlivet Scotch whiskies posted sales of just over €1.9 billion (£1.6bn) for the three months to the end of March, up 19.1 per cent on the year before on an organic basis and ahead of forecasts.

That marks an acceleration on the first half performance, leading to sales for the first nine months of the financial year of €6.9bn, up by 1.7 per cent on an organic basis.

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French firm Pernod Ricard is the world’s second largest spirits group after Diageo. Its other brands include Mumm champagne, Absolut vodka and Martell cognac.

Pernod Ricard is behind Chivas Regal and The Glenlivet Scotch whiskies. Picture: John Devlin

The group expects sales to pick up further in the fourth quarter thanks to the gradual reopening of the hospitality sectors in key markets, though it warned its travel-based sales would remain subdued due to coronavirus lockdowns and restrictions.

Bosses are now guiding investors towards an organic growth in profit from recurring operations for the full-year of about 10 per cent.

Chairman and chief executive Alexandre Ricard said: “Our Q3 was excellent, marking a return to organic sales growth for [the nine months]. This confirms the strength of our business, with strong dynamism of our domestic must-win markets and good resilience throughout.

“In a still uncertain and volatile global context, with the current information available on the pandemic, we will continue to implement our strategy while actively managing resources, in particular strongly reinvesting where efficient.

“We expect our sales to accelerate in Q4 and accordingly are providing guidance of an organic growth in profit from recurring operations for full-year FY21 of circa 10 per cent,” he added.

Across the nine months, the group’s strategic international brands category saw growth of 1 per cent, driven by Martell, Malibu, Jameson and The Glenlivet. Absolut and blended Scotch suffered a fresh fall, impacted by their exposure to the travel market.

Strategic local brands were said to be “stable”, thanks to double-digit growth of Kahlua, Passport and Ramazzotti.

Specialty brands enjoyed growth of 22 per cent, with “continued strong dynamism” of Lillet, Malfy and Aberlour in Western Europe, and Tequila and American whiskey in the United States.

In February, Pernod Ricard said sales for the first half suffered an organic decline of 3.9 per cent, compared with the previous year, as it was also impacted by unfavourable foreign exchange rates.

Sales excluding travel retail nudged up 1 per cent with China up 13 per cent and the US gaining 5 per cent.

Europe saw a 5 per cent decline as strong growth in Germany, the UK, Russia and Poland was more than offset by the Covid impact in Spain, France, Ireland and the travel retail sector as countries locked down borders.

In January, Johnnie Walker and Haig Club owner Diageo pointed to “encouraging” signs as sales rebounded in key global markets where Covid restrictions have eased or been less onerous.

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