Investors raised a glass to French drinks giant Pernod Ricard despite the world’s second biggest distiller revealing it had suffered a sales slump in its flagship Absolut vodka and Chivas Regal whisky brands.

Shares in Paris-listed Pernod rose as much as 3pc to €106 after the business posted a 2pc increase in profits from recurring operations to €2.28bn on revenues that rose 1pc to €8.68bn in the year to the end of June.

Profits were up despite sales of Absolut and Chivas Regal both declining 4pc over the 12 months, knocked by flagging demand in Asia.

China in particular has proved a tough market for Pernod, with the distiller’s total sales plunging 9pc amid a Government clampdown on gift-giving, corruption and flashy spending.

Its leading vodka brand has also suffered from waning popularity in America.

“China remains an issue for Pernod as does Absolut in the US albeit its trajectory is improving,” said Phil Carroll, an analyst at stockbroker Shore Capital.

Nevertheless, despite those difficulties management still buoyed shareholders today by pledging to deliver €400m of cost cuts by 2020, of which €100m will be reinvested back into the business.

Pernod also set out a target of growing profits by between 2pc and 4pc on an organic basis this year.

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