Asia cognac boosts Remy Cointreau, pays dividend

 (Reuters) - French spirits group Remy Cointreau handed investors a special dividend on Thursday after strong demand for cognac in Asia lifted full year profits, and it said prospects for this year looked bright in all regions.

Remy Cointreau (RCOP.PA), which last week finalized the sale of its champagne business, also slashed debt by 34 percent to 328.9 million euros ($481.9 million).

Demand for premium cognac in Asia was a key growth driver while recovery in Europe and the United states also helped.

"This will continue in coming months. I have a very good feeling about the first quarter," Chief Executive Jean-Marie Laborde told a news conference.

Laborde however did not give a detailed guidance apart from saying prospects for full year 2011-12 were "clearly positive" and Remy shares were up just 0.3 percent by midday after rising 1.5 percent in early trade.

"No guidance as usual. Good company but too expensive," said CA Cheuvreux analyst Xavier Croquez.

Remy Cointreau trades at 20.8 times FY 2011-12 estimates against 16.4 times for Pernod Ricard (PERP.PA), Reuters data show.

Remy, which has a market capitalization of 2.8 billion euros, competes with Pernod Ricard and Diageo (DGE.L).

Analysts had been keen for news on how Remy would use the cash generated from the sale of its champagne business but Laborde gave little away on the subject.

NO VODKA, NO TEQUILA

Laborde said organic growth remained a priority even though Remy would use cash to support its brands and to "complement its brand portfolio in coming months or coming years."

He later said in response to questions from journalists that Remy had no interest in acquiring any tequila brands as they are too dependent on the U.S. market, nor a vodka brand, which he regarded as not sufficiently high-end.

Operating profit, excluding exceptional items for the year ended March 31, rose 17.6 percent on a reported basis to 167 million euros, after sales grew 12.4 percent.

On a like-for-like basis, operating profit rose 8 percent, against Remy's forecast for 8.4 percent.

The cognac division achieved like-for-like operating profit growth of 20.3 percent, driven by strong demand for premium cognac in Asia, growth in the Russian market and travel retail.

Laborde said Remy would continue to invest strongly in its brands and was confident it could increase prices in all regions, notably in China and in the cognac sector.

Liqueurs and spirits were a sore spot as sales of the Metaxa brandy in Greece continued to suffer from difficult market conditions, and high marketing investment to support the brand contributed to an 18.8 percent drop in like-for-like operating profit for the division.

Laborde however vowed to continue investing in Metaxa even though Greece would continue to suffer from tough economic conditions.

Remy said it would pay an ordinary cash dividend of 1.30 euros per share, unchanged from 2009/10, and a special dividend of 1 euro per share.

Diageo and Pernod Ricard, the world's biggest spirits makers, beat forecasts with strong sales growth in the first three months of 2011 as buoyant emerging market growth offset a weak Europe.

Last week Remy sold its champagne division to privately held company EPI for an enterprise value of 412.2 million euros.

Remy, which expects to close the deal by early summer, will continue to distribute the champagne brands -- which comprise the Charles Heidsieck and Piper-Heidsieck brands.

The champagne division benefited from a recovery in demand and posted sales growth of 4.6 percent. It generated a current operating profit of 28 million euros compared to a loss of 4 million euros in the previous year.

Remy Cointreau shares have gained 8 percent this year, outperforming the European sector .SX3P.

(Reporting by Dominique Vidalon; Editing by David Hulmes and Sophie Walker)