February 8, 2019 / 7:11 AM / 5 months ago

Elliott: Pernod's results were good but company needs to do more

PARIS, Feb 8 (Reuters) - Activist hedge fund Elliott on Friday said results this week from French drinks group Pernod Ricard were good but added it still wanted more in terms of its corporate governance and plans to boost growth.

Elliott, which has a stake of just over 2.5 percent in Pernod, was responding after Pernod’s results this week, in which the group raised its profit growth outlook for 2018-2019.

“Pernod’s half-year earnings announcement confirmed the strong growth potential and solid financial performance of the company. It also reflected a first small step in starting to address the company’s shortcomings in operational efficiency,” Elliott said in a statement.

“However, the financial objectives of the newly announced plan could be more ambitious — the target savings of 100 million euros and the margin step-up of 50-60 basis points per year over the period FY19-21 represent modest goals for a company with an EBIT (earnings before interest and tax) of around 2.5 billion euros that operates at close to a 5 percentage points EBIT margin discount to its closest peer,” added Elliott.

Reporting by Sudip Kar-Gupta; Editing by Leigh Thomas

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