Remy Cointreau upbeat as annual profit beats forecasts By Reuters

By Dominique Vidalon

PARIS (Reuters) -Remy Cointreau beat estimates for full-year operating profit growth on Thursday thanks to rebounding demand for its premium cognac in the United States and China, and was upbeat about its prospects for the current fiscal year and beyond.

The maker of Remy Martin cognac said it had emerged stronger from the COVID-19 crisis as it accelerated trends such as buoyant at-home consumption in the United States, a craze for cocktails and rising e-commerce sales – all of which supported its push towards higher-priced spirits to boost margins.

Remy Cointreau, which plans to buy back up to 1.98% of its equity capital, also handed investors an 85% increase in its dividend, which helped lift its shares by 3%.

It forecast an “excellent” start to its 2021/22 financial year that started on April 1 and said it had decided to increase its investment in communication to support its brands.

A rebound in demand for its premium cognac in China and the United States, along with tight control over costs, lifted Remy’s organic operating profit by 12.8% to 236.1 million euros ($288 million) in the year ended March 31.

Analysts on average and Remy itself had expected 10% growth.

This marked a sharp turnaround from a 22% fall in group profit a year earlier due to the impact of the pandemic.

The company said it was confident it would achieve a gross margin of 72% and an operating margin of 33% by 2030, up from 67.3% and 23.4% respectively in 2020/21.

Remy Cointreau reiterated its goal was to become a “global leader in exceptional spirits” while also building a business model more focused on sustainability.

While Remy expected good growth in operating profit this year, it said that would be tempered by adverse currency effects estimated at 16 to 20 million euros and a 2 million euro hit following asset sales.

($1 = 0.8201 euros)