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Pernod's profit growth accelerates, invests in China malt whisky distillery

PARIS, Aug 29 (Reuters) - Profit growth at spirits maker Pernod Ricard, which is being targeted by activist investor Elliott, accelerated in the 2018/19 financial year, driven by strong demand in China where Pernod will invest $150 million to produce malt whisky.

Pernod, which is the world's second-biggest spirits group behind Diageo, handed investors a 32% dividend hike and unveiled plans to buy back up to 1 billion euros ($1.1 billion) in shares. It also appointed two new independent board members.

Pernod Ricard is under pressure from U.S. hedge fund Elliott to improve profit margins and corporate governance.

For the year ahead, Pernod Ricard was cautious, citing a "particularly uncertain environment". It forecast underlying profit growth from recurring operations of between 5% and 7% for the full year ending June 30, 2020.

This would compare with the 8.7% rise achieved in the 2018/2019 financial year, which topped the company's guidance for 8% growth, and was an acceleration from 6.3% growth in the 2017/18 financial year.

($1 = 0.8973 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)