Drinks group positive
Diageo hails resilience amid ‘volatile’ trading
Ivan Menezes: ‘we expect ongoing volatility’ (pic: Terry Murden)
Johnnie Walker to Guinness drinks group Diageo said underlying net sales – excluding currency fluctuations – grew 1%, as strong demand at retail stores in the US made up for weak business at bars and restaurants in Europe.
North America was up 12.3%, offsetting declines in other regions.
Reported net sales for the half year fell 4.5% to £6.9bn. Reported operating profit of £2.2 billion was 8.3% lower, driven by unfavourable exchange and a decline in organic operating profit.
Profit before tax fell from £2.5bn to £2.2bn.
The company said it will increase its interim dividend by 2% to 27.96p per share.
Ivan Menezes, CEO, said: “We expect ongoing volatility and disruption in the second half of the year, particularly in the on-trade channel, which will make performance more challenging.
“The medium and long-term growth drivers and opportunities for our business remain intact and I am confident in our strategy, the resilience of our business and Diageo’s ability to emerge stronger.”
Speyside Distillers, which operates the Speyside Distillery near Kingussie, has revealed plans to relocate to a new distillery.