Rémy 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 ofRémy 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.
Rémy 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 1 April and said it had decided to increase its investment in communication to support its brands.
Organic Operating Profit
A rebound in demand for its premium cognac in China and the United States, along with tight control over costs, lifted Rémy 's organic operating profit by 12.8% to €236.1 million ($288 million) in the year ended 31 March.
Analysts on average and Rémy 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.
Rémy Cointreau reiterated its goal was to become a "global leader in exceptional spirits" while also building a business model more focused on sustainability.
While Rémy expected good growth in operating profit this year, it said that would be tempered by adverse currency effects estimated at €16 to €20 million and a €2 million hit following asset sales.
News by Reuters edited by Donna Ahern, Checkout. For more drinks stories click here. Click subscribe to sign up for the Checkout print edition.
