By Amelie Baubeau
PARIS -- Remy Cointreau /zigman2/quotes/206802273/delayed FR:RCO 0.00% SA beat forecasts Thursday with better-than-expected fiscal first-half revenue and reassured investors that it isn't in breach of banking convenants, sending the French spirits company's share price sharply higher.
Revenue in the six months ended Sept. 30 fell 0.7% from a year earlier to €363 million ($541.6 million). Favorable currency fluctuations curbed the drop: The company recorded a 6.6% decline in sales at constant exchange rates. The company didn't report net-profit figures.
Still, the revenue was better than analysts expected, and Remy Cointreau shares closed up 8.5%, after rising as high as 13.6% in early trading.
Remy Cointreau noted that it saw an improvement in second-quarter sales of cognac and spirits. The Remy Martin brand recorded organic sales growth of 6.7% in the three-month period, boosted by demand in the Asian-Pacific region.
The company didn't issue a full-year forecast.
The company's other brands include Cointreau liquor; Metaxa, a Greek blend of brandy and wine; Mount Gay rum and Piper-Heidsieck and Charles Heidsieck champagnes.
Remy Cointreau's liqueurs and spirits division recorded growth in its principal markets for all its brands, with the exception of Metaxa.
Oddo Securities said the improvement in cognac and spirits was a "good surprise" facilitated by a new distribution network in Asia. The company said it has improved its distribution of products after having quit its Maxxium distribution venture as of March 31, especially in Asia.
The commpany's champagne performance lacked fizz during the fiscal first half, but the first six months aren't very significant as they only account for a small part of full-year sales, the company said.
Remy Cointreau said it had met bank debt covenants through to the end of September.
This removes "investor concerns of a potentially expensive refinancing," Merrill Lynch Bank of America said in a note. They nonetheless maintain their underperform rating on the stock.
Write to Amelie Baubeau at email@example.com