Guinness pushes Diageo sales growth

Source: Food and Drink Digital

Date :15/02/2008 09:32:36

Global drinks firm Diageo has returned to growth thanks to an impressive performance from Guinness in the UK and Ireland.

Diageo has reported pre-tax profits of £1.37 billion for the six months to the end of December, up just over five percent on the same period the year before. Net sales were up seven percent, and sales by volume were up four percent, in line with market expectations.

In a declining beer market, Guinness sales were up six percent, gaining market share in the UK and Ireland. Much of this was put down to an increase in marketing investment and new advertising campaigns.

Price rise

In the US, a weaker dollar against the pound hit the business although underlying operating profits were seven percent higher at £491 million, thanks largely to the company raising the prices of its spirits such as Captain Morgan rum.

Paul Walsh, Chief Executive of Diageo said, “This first half performance demonstrates that our brands are well supported and our routes to market remain strong and therefore, while we continue to watch for any impact that recent financial market volatility may have on broader trading conditions, we are maintaining our guidance for nine percent organic operating profit growth for the current fiscal year.”

Overall, the company said that it was confident over its full-year performance, despite worries over a US slowdown and the UK smoking ban.

February 15, 2008