Activist investor Elliott kept up the pressure on French spirits group Pernod Ricard, welcoming this week's first-half results but calling for boardroom changes and better margins.
Elliott, which has built a stake of just over 2.5% in Pernod Ricard, has called on the family-backed group to raise profit margins to bring them more into line with British rival Diageo.
Elliott has suggested €500 million ($565 million) in cost cuts and options such as merging with another spirits company.
The hedge fund, which has become increasingly active in Europe in recent years, issued a statement on Friday after Pernod's results this week when the group raised its profit growth outlook for 2018-2019 and unveiled new margin goals in a three-year strategy plan.
"Pernod's half-year earnings announcement confirmed the strong growth potential and solid financial performance of the company. It also reflected a first small step in starting to address the company's shortcomings in operational efficiency," Elliott said.
Last month, Pernod Ricard took a step towards improving its governance, naming Patricia Barbizet to the newly created role of lead independent director.
Nevertheless, Elliott on Friday made clear it wanted more.
"Necessary enhancements to the company's board and corporate governance have yet to be addressed," Elliott said.
Chief Executive Alexandre Ricard, 46-year-old grandson of the firm's founder, made sales growth his top priority when he took over in 2015 and has defended his long-term value strategy.
Elliott has blamed Pernod's underperformance in part on what it views as poor governance, having highlighted that Pernod's 15-member board needs more diversity and independence, since many directors are linked to the Ricard family.
One indicator of the family's influence, which was controversial, was double-voting rights at Pernod Ricard, a source familiar with the situation said. Most French companies have a two-year period before an investor can get these rights while at Pernod Ricard it is 10 years, restricting the influence of outsiders.
Elliott also said Pernod's targeted savings of €100 million euros and a margin step-up of 50-60 basis points per year over the next three years were "modest goals" for a company of its size.
Liberum analysts, which had hoped for a margin step up of some 150 basis points, also called Pernod's plan a 'a bit soft'.
Pernod shares traded 0.6% lower by 1115 GMT.
A spokesman for Pernod Ricard told Reuters that its first-half results this week showed how its strategy was working, and that Pernod 'remains focused on executing its strategy plan while continuing a regular dialogue with all its shareholders'.