World News: 07:32 GMT Thursday 29th August 2019. [Yahoo Business News Feed via SPi World News]
(Bloomberg) -- Pernod Ricard SA reported its strongest annual earnings growth in seven years, fueled by Chinese demand, and announced a 1 billion-euro ($1.1 billion) share buyback.After sales in China surged 21%, the company is doubling down in that market by building a $150 million distillery in Sichuan province to produce single malt whisky. The company also announced the $223 million purchase of New York-based Castle Brands to add Jefferson’s bourbon to its portfolio.The positive results add steam to a distilling industry that’s been an outperformer in the wider consumer-goods sector. The revival of cocktail culture has boosted sales of high-end liquor brands such as Pernod Ricard’s Monkey 47 gin and Martell cognac.Profit from recurring operations rose 8.7% to 2.58 billion euros in the year through June, edging out analysts’ estimates. However, the company forecast a slight slowdown this year to profit growth of 5% to 7%.Pernod Ricard is under pressure after activist investor Elliott Management Corp. took a stake in the company late last year. The buyback also follows rival Diageo Plc’s plan to return as much as 4.5 billion pounds ($5.5 billion) to shareholders.The company also raised its dividend so that it’s now paying out 50% of earnings.“Now that we’ve significantly deleveraged our business to the lowest leverage ratio in at least 15 years, it’s the right time to clarify our strategy with shareholders,” Chief Executive Officer Alexandre Ricard said by phone of the buyback plan. He said the payout ratio has been lower over the past decade because of Pernod Ricard’s acquisition strategy.To contact the reporter on this story: Thomas Buckley in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Eric Pfanner at email@example.com, Thomas Mulier, Jeff SutherlandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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