August 31, 2017 / 5:57 AM / 3 months ago

Pernod Ricard confident on acceleration in profit growth for 2017-2018

PARIS (Reuters) - French spirits maker Pernod Ricard said on Thursday it was confident that profits for the current financial year would show an acceleration from the 2016/17 underlying profit growth of 3.3 percent it reported on Thursday.

A barman of French drinks maker Pernod Ricard group prepares drinks for clients at the " Club Pernod" in Marseille, France, April 27, 2016. REUTERS/Jean-Paul Pelissier/Files

Cost cuts, robust sales in its top market of the United States, and stronger demand in China offset weakness in India as Pernod posted the rise in earnings.

Pernod - the world’s second-biggest spirits group behind Britain’s Diageo - also handed investors a 7 percent dividend hike, and the owner of Mumm champagne and Martell cognac was confident it would improve its performance.

Pernod Ricard forecast underlying profit growth from recurring operations of between 3 percent and 5 percent for the full year up to June 30, 2018.

This would be an acceleration from the 3.3 percent rise in profit from recurring operations in the 2016/2017 full financial year, when profits came in at 2.394 billion euros ($2.84 billion) - slightly below the average of 2.42 billion euros in an Inquiry Financial poll for ThomsonReuters.

The 2016/17 performance was near the high end of Pernod’s guidance for underlying operating profit growth of 2-4 percent.

($1 = 0.8420 euros)

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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