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(Sharecast News) - Struggling spirits group Remy Cointreau posted weaker annual earnings on Thursday, but pledged to bolster profits by 100m, sending shares sharply higher.
The French cognac and brandy business posted a 5% decline in sales in the year to 31 March to 935.3m. On an organic basis, Remy Cointreau posted its first positive annual growth since 2023, albeit just 0.2%.
Operating profits fell 23.8%, or by 11.5% on an organic basis, to 165.4m, modestly better than expected.
The group - which as well as Remy Martin and Cointreau owns Greek spirit Metaxa and Mount Gay rum, among others - has been hit by soaring living costs and tariffs in the US and China, two of its most important markets.
However, Remy Martin used the results to unveil RC Forward, an "ambitious" three-year transformation plan intended to turn its fortunes around. "In a persistently complex and volatile environment, both economic and geopolitical, Remy Cointreau has decided to go on the offensive," it said.
"The plan marks a decisive shift for the group, with a particular focus on regaining market share, maximising the potential of its brands and sustainably strengthening its business model."
The plan is based on three core approaches - centralising procurement, improving commercial execution and boosting sales in key markets - and is expected to add around 100m to profits by 2028-29. A new division dedicated to emerging markets will also be established.
Chief executive Franck Marilly said: "In this year of transition, we have won several key battles: our brands are regaining ground in the US, Remy Martin is strengthening its leadership and market share in China, and our travel retail business is gradually recovering, with the aim of doubling in size within three years.
"At the same time, we have continued to reduce overhead costs while maintaining investment in our brands."
He said RC Forward was designed to "sustainably strengthen our fundamentals and create value across all our operations" as well as reducing the company's exposure to macroeconomic cycles.
Marilly, who became chief executive a year ago, first announced a turnaround plan in April but this is the first time details have been published.
As at 0845 BST, the Paris-listed stock jumped 13%.