Scotch giant Pernod reveals slower sales but sticks to 1bn profits goal

Pernod, which operates in Scotland through its Chivas Brothers subsidiary, blamed destocking, mainly in the US and eastern Europe, for a 12 per cent drop in like-for-like sales in the three months to March.

Pierre Pringuet, chief executive, admitted that trading had been well below the global trend in spirit consumption during the period, which was "flat to slightly down".

But he added: "We believe our sales for the current quarter will be more in line with consumer demand."

The bulk of destocking occurred in the first three months of 2009, Pringuet said.

But he warned that it could continue in the US in the coming months.

His comments came as Pernod, which has 1,500 staff at 26 sites in Scotland, revealed that nine-month sales rose 9 per cent to 5.6 billion (4.9bn).

Among the best-performing brands were The Glenlivet, with sales up 7 per cent, Jameson Irish whiskey, sales up 11 per cent, and Martell brandy, where sales rose 13 per cent.

Pernod said it was now looking for organic profit growth of 3 to 5 per cent in its full year to the end of June. This was scaled back from a previously forecast 5 to 8 per cent. But the French group is sticking with its prediction that overall profits will rise by double digits and exceed 1bn for the first time.

The company, whose Scotch brands also include Ballantine's and Clan Campbell, announced the terms of the 1bn rights issue it flagged earlier this month.

That capital-raising, along with the $575m (391m) sale of its Wild Turkey bourbon brand this month to Campari, is an attempt by the French giant to manage its net debt of 12bn.

Pernod's investors will be able to buy three new shares for every 17 held at a price of 26.70 each, or a 36 per cent discount to the closing price on 14 April.

Francis Pretre, an analyst at French brokerage CM-CIC Securities, said: "This is a bigger discount than I expected." He said he had expected a discount closer to 30 per cent.

Pretre said Q3 sales, published two weeks early, were in line with market expectations.

Pringuet said Pernod wanted to capitalise on the "window of opportunity" for its rights issue offered by relatively more favourable market conditions of recent weeks. France's benchmark CAC 40 index has gained 19 per cent since a low point reached on 9 March and has been rising steadily since last Wednesday.

Pringuet added that the company would consider selling other non-strategic brands and could dispose of other assets such as property.

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