Accolade Park freehold sale? Pernod Ricard first half

Disappearing act

An interesting news report appeared last week but then disappeared very quickly. It was headlined “IGIS to buy Accolade Park warehouse in Bristol”, and started:

“South Korea’s IGIS Asset Management Co is working on to buy Europe’s largest wine warehouse and distribution centre in Bristol, UK, from Australia-based global winery Accolade Wines in the UK for about 100 billion won ($87.6 million).  

“According to the investment banking industry, IGIS Asset Management has been courting local institutional investors to launch a real estate fund designed to invest in Accolade Park, Europe’s largest wine warehouse and distribution centre… commanding a space of 80,000 square meters.” 

Something was or is going on, but what?  CHAMP Private Equity, the owner of Accolade Wines, is either going to float, find a buyer or retain Accolade within its own portfolio. An impending float was hot news in the later part of 2016 but various issues keep arising that make it look less attractive.

Stripping the assets makes some sense, and TKR thought the distribution centre a prime target. CHAMP has gone part way. This statement is from Georgia Lennon, Accolade’s corporate affairs and communications director:

“In response to your enquiry – The alleged possible transfer is only in relation to the freehold of the property. Accolade Wines is a longstanding tenant and all Accolade Wines rights are unaffected by a transfer.”

Pernod Ricard slow and steady

The key figures for the Pernod Ricard half-year results show the company is advancing at a slow but steady pace:

  • Sales: €5061 million ($6957 million), up 2 per cent
  • Net profit: €924 million, up 3 per cent

The sales were split:

  • Mature markets: €3076 million, up 3 per cent
  • Emerging markets €1985 million, up 6 per cent

Wine sales recorded just a 2 per cent increase across the major brands. The company made little comment other than to say Campo Viejo did well in the UK and Jacob’s Creek in the Pacific region.

The winner and loser brands appear on the strategic international brands organic sales growth chart. It reveals that the company favourite has also been the company disappointment. Absolut Vodka sold 6.2 million nine-litre cases, an increase of just 2 per cent in volume and 1 per cent in value.

The real star was Jameson Irish Whiskey, which recorded an increase in volume of 20 per cent to 3.6 million cases, and a 16 per cent increase in value.

Absolut has not performed as expected since it was acquired. While net debt is falling, it remains high:

  • Debt 31 December 2015: €9258 million
  • Debt 31 December 2016: €8953 million

What about the Brexit effect? Pernod Ricard, like Treasury Wine Estates, says Britain’s impending departure from the EU is adding uncertainty to the market.

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