DRINKS group Remy Cointreau said yesterday that its whisky sales had
risen 20% in the nine months to December, thanks to the strength of the
Highland Distilleries' Famous Grouse and the Macallan Glenlivet brands
in markets where it acts as distributor.
The joint Heriard Dubreuil family and Remy investment in the industry
is now worth #85.4m, being the 10% of Highland currently worth #46.6m,
with Highland 14p better at 373p, while the 26% holding in Macallan is
valued at #38.8m at 127p.
In return, Highland has an indirect 16% stake in Remy (about #108m at
present) as well as board representation.
Joint managing director Francois Heriard Dubreuil confirmed that there
is no intention of changing the Macallan holding.
Overall group turnover rose 6.2% to Fr4665m (#525m) although sales of
cognac were affected by two factors.
One was the decision of the Chinese Government on December 15 to
impose 17% VAT on retail sales as from January 1 this year. That is
despite no traders having been issued with VAT numbers in advance.
Cognac sales stopped for obscure reasons but have suddenly revived to
the extent that Remy is now having to supply the most important market
40% of the total by plane.
The other depressant was over-stocking in the US in 1992 because of a
build-up in 1992 ahead of a threatened trade war. However, that market
is now moving back into balance.
Champagne sales have recovered strongly in the UK but are flat in
Europe, while Cointreau is now benefiting from its fresh marketing which
is changing the image of it as a Christmas-only liqueur.
Profits for the six months to September rose 24% to Fr129m (#14.5m)
and the full-year total could improve from Fr202m to a little over
Fr250m.
Remy is much less exposed to Japan than the Guinness 24%-owned
associate LVMH and so has not suffered the effects of cognac price
discounting which has lowered some prices by two-thirds in Tokyo.
The shares rose Fr5 to Fr255 in Paris, where they sell at around 25
times earnings in a market that is high in liquidity and short of stock
at present.
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