Pricier bubbly boosts Laurent-Perrier

Laurent-Perrier SA, the maker of Grande Siecle champagne, said full-year profit rose 15 percent after demand for higher-priced sparkling wine swelled margins.

Net income climbed to 34.6 million euros, or 5.87 euros a share, in the year through March from 30.2 million euros, or 5.11 euros, in the prior period, the Tours-sur-Marne, France-based company said yesterday in a statement published in La Tribune newspaper. Sales advanced 5.4 percent to 249 million euros.

The company said it is seeking an operating margin of more than 30 percent in the medium term, and a return on capital of more than 15 percent. The operating margin rose to 26.4 percent in the year to March, from 23.9 percent a year earlier.

Laurent-Perrier is focusing on Cuvee Rose Brut and other luxury brands and selling them through more-exclusive venues to improve profitability. It's placing less emphasis on sales of lower-priced vintages, a strategy that forced the vintner to reduce its sales-growth forecast in February. Champagne demand is climbing as incomes swell in emerging markets.

"The company is selling its premium vintages through more selective distribution channels," Christine Ropert, an analyst at Gilbert Dupont in Paris, said in a research report before the figures were released. "This will improve profitability but will reduce volumes, particularly in France, Belgium and the UK."

Global champagne sales have almost doubled since 1988 as production has climbed 23 percent by number of bottles, Epernay, France-based industry group Comite Interprofessionnel du vin de Champagne has said. Production is nearing its limits because the sparkling wine is made only in certain vineyards in the northeastern French region of the same name.

Agencies

(China Daily 06/04/2008 page16)