FDBusiness.com

Helped by a strong performance from its cognac division, French drinks group Remy Cointreau has reported a 7.2% organic growth (2.2% on a published basis) in operating profit to Eur140m for the year ended March 31st 2010 on turnover of Eur807.8m, up by 12% organically (13.1% published). Group organic operating profit margin fell from 19.2% to 18.4%, primarily reflecting increased advertising and promotional investment.

Net profit from continuing operations was Eur86.0m after tax, reflecting a more favourable tax rate than in the previous year, which was affected by the non-tax deductible capital loss incurred on disposing of the group’s shares in the Maxxium distribution joint venture.

Within the cognac division, Remy Martin recorded a remarkable 28.2% growth in turnover to Eur405.7m, benefiting from significant price increases, distribution integration and an excellent performance by its premium cognacs, particularly in Asia which has become the brand’s leading export market. Current operating profit jumped by 37.8% to Eur105.9m, and the operating margin rose to 27.6% organically, from 25.7% the previous year, although there was a significant increase in advertising investment.

However, the champagne division, which is significantly export-oriented, was adversely affected by the international economic climate. Turnover declined by 23.7% and the division incurred a current operating loss of Eur4m as Remy Cointreau continued its deliberate policy of maintaining prices to the detriment of volume.