Elliott Says Pernod's New Goals Could Be More Ambitious
08 Février 2019 - 9:45AM
Dow Jones News
By Cristina Roca
Elliott Management Corp. (ELLA.XX) said Friday that the
financial targets of Pernod Ricard SA (RI.FR) could be more
ambitious, after the spirits maker set out fresh mid-term guidance
yesterday during half-year earnings reporting.
The U.S. activist fund, which late last year disclosed that it
had built a stake in Pernod, has been pushing for changes to the
company's operational strategy and governance, saying it lags
behind peers such as Diageo PLC (DGE.LN).
Elliott said on Friday that Pernod's new plan "is a first small
step in starting to address the company's shortcomings in
operational efficiency."
Pernod, the owner of Absolut vodka, raised its full-year
operating profit guidance yesterday and said that as part of its
mid-term plan, it will target sales growth of 4%-7% between fiscal
2019 and 2021.
It will also increase its operating leverage by 50 to 60 basis
points per year between fiscal 2019 and 2021 and gradually increase
its dividend distribution to around 50% of profit from recurring
operations by fiscal 2020, up from a distribution of 41% for fiscal
2018, it said.
In an interview with the Wall Street Journal published Thursday,
Pernod Chief Executive Alexandre Ricard hit back at Elliott, saying
the business is going in the right direction.
However on Friday, Elliott said that it believes these targets
could go further, and that the steps proposed by Pernod lack
specificity and clarity. "Necessary enhancements to the company's
board and corporate governance have yet to be addressed," the
activist investor said.
Write to Cristina Roca at cristina.roca@dowjones.com;
@_cristinaroca
(END) Dow Jones Newswires
February 08, 2019 03:30 ET (08:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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