Diageo eyes stronger profits growth
Drinks giant Diageo today said it was hopeful that profits growth will be stronger over the next year as it benefits from a rebound in trading.
The Guinness-to-Johnnie Walker group has been encouraged by sales trends in the six months to June 30, when growth in developing markets helped to offset continued trading pressure in North America and most of Europe.
Operating profits rose by 2% to €3.36bn in the year to June 30 and this rate should strengthen in the new financial period, the company added.
The group reported an 8% drop in Irish sales in their annual results, but says it has made market gains in beers and spirits.
Sales of Guinness were down 5% by June 30, but the company said this fall is in line with the overall decline in the drinks industry.
However, Guinness' market share has risen slightly to 32.6%, which effectively means it accounts for one of every three pints bought in Irish pubs. The drink has enjoyed 30 consecutive months of growth in Irish pubs.
It said Guinness outperformed the beer category in Britain with broadly flat sales following the success of its Bring it to Life and 250th anniversary marketing campaigns.
Diageo said price pressure in Britain was driven by the faster growth of sales in the grocery sector, with “its competitive promotional environment”.
The company is also behind brands including Smirnoff vodka, Captain Morgan rum, Tanqueray gin and Jose Cuervo tequila.
The group was created through the merger of Grand Metropolitan and Guinness in 1997 and has more than 20,000 staff and offices in 80 countries.
