French spirits group Remy Cointreau said on Tuesday it was actively looking for acquisitions after cutting first-half debt and said it had the firepower to seal deals worth up to 800 million euros ($1.07 billion).

The maker of Remy Martin cognac, Cointreau liqueur and Mount Gay rum also saw a forecast-beating rise in first-half operating profits due to strong demand for its premium cognac in Asia.

It predicted a substantial increase in full-year earnings despite Europe's ongoing economic woes, and its shares rose 3 percent.

Remy-Cointreau, which sold its champagne division earlier this year, told Reuters that it was actively looking to buy one or two brands to complement its portfolio even though the group's priority remained to grow organically.

We have an estimated investment capacity of between 500 and 800 million euros for one or more acquisitions, Chief Executive Jean-Marie Laborde said after a news conference on the group's first-half results.

Laborde reiterated that Remy was not interested in a vodka or a tequila brand but in premium liquors, whiskies or even a Baiju Chinese alcohol.

Remy, which has announced plans to eventually buy back up to 10 percent of its capital, could use some of the repurchased shares to pay for acquisitions, using a share swap with a target company, Laborde told the news conference.

SUBSTANTIAL EARNING RISE

First-half operating profits reached 106.2 million euros for the six months to September 30, ahead of 101 million average estimate in a Thomson Reuters poll of five analysts.

The good results in the first half allow us to confirm a substantial increase in earnings at end-March 2012, Remy said in a statement.

In an uncertain economic and monetary environment, in particular in Europe, Remy Cointreau confirms the relevance of its long-term value strategy, it added.

Remy's financial year runs from April 1 to March 31.

Remy, which has a market capitalization of 2.9 billion euros, competes with spirits makers Pernod Ricard
of France and Britain's Diageo .

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For graphics on the drinks industry: http://r.reuters.com/xym35s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Remy Cointreau said it was reaping the fruits of its positioning on an upscale sector that has largely escaped economic woes.

At this stage, we have no real worry about the months ahead of us though we remain cautious, Laborde said.

Remy already posted an 18.1 percent rise in underlying sales in the first six months of its fiscal year as its cognac division continued to benefit from higher pricing in Asia.

The Remy Martin cognac, which makes the bulk of the group's sales and profits, achieved a 34.4 percent organic rise in operating profit.

All the group's divisions and regions contributed to growth and signs of recovery in the U.S. and Europe were confirmed.

In the United States, the trend for demand for superior quality cognac was favorable and Remy planned to increase prices more aggressively in the region, Laborde said.

Cognac sales in Europe also performed well, particularly in France, Germany and Russia.

Europe is showing good performances, which is a surprise in view of the current economic climate, CM-CIC analysts said in a note.

By 1135 GMT, Remy Cointreau shares gained 2.84 percent at 61.86 euros, outperforming their European sector <.SX3P> which gained 0.5 percent.

(Reporting by Dominique Vidalon; Editing by Helen Massy-Beresford)