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Pernod shares drop 4% after results

Published:  23 July, 2008

Pernod Ricard's half-year results disappointed investors and the group's shares fell by 4.6% on the day of the announcement.

Although the French company stressed that it expected its operating profits for the full year to the end of June to rise by about 20%, at the halfway mark its net earnings were just 2.3% ahead of the figure at this time last year. The profit figures were depressed by larger-than-expected negative currency movements, and especially by the weakness of the US dollar, which the company estimates cost it 40m in the six months to 31 December 2006. The company, however, underlined that its operating margin had risen strongly to 23.5%.

Announcing the results, Patrick Ricard, chairman, said Pernod Ricard was in a financial position to purchase both Absolut vodka and to secure the full international distribution rights for Stolichnaya, if it wished to do so, despite having net debt of 6.8 billion, a figure that had fallen substantially from the 8.8bn in the aftermath of the Allied Domecq takeover.

Ricard went on to say, that one or other [of the two vodka brands] would be enough for us'.