Burger King disappoints Diageo
Falling profits at Burger King have dented an otherwise upbeat performance from Diageo.
The drinks group saysprofits at the fast food chain have fallen 12% as the economic slowdown and foot-and-mouth hit the business.
But, for the whole group, pre-tax profits before one-off costs rose 9% to £1.98 billion.
Burger King was hit by a lower number of restaurant openings in the US and fears about the foot-and-mouth crisis in Europe.
Sales in the UK were "marginally down" during the 12 months to the end of June, and fell 9% in Germany, where concerns about BSE were also rife.
By contrast, group's premium drinks brands, which include Johnnie Walker, Smirnoff and Guinness, boosted profits.
Diageo finance director Nick Rose says he's "disappointed" by the results at Burger King, where operating profits slumped by £25m to £177m.
The group plans to float off the burger chain to focus on its premium drink ranges, but Mr Rose says the setback could push back its timetable.
"We cannot make any progress on a separation of any kind until we are confident about the underlying performance of Burger King," he said.
A new management team has been brought in to turn the business around but the chain's performance is unlikely to improve for at least six months, he added.
