Gin sales boost Diageo profits
Guinness owner Diageo saw profits rise last year driven by sales of its Gordon’s and Tanqueray gin.
The figures
Net sales increased 5.8 per cent to £12.9bn and operating profit soared 9.5 per cent to £4bn, driven by organic growth.
Net cash from operating activities was £3.2bn, up £164m.
Earnings per share increased by 7.4 per cent to 130.7p and the final dividend increased five per cent bringing the full-year dividend to 68.57p per share.
The board approved plans for an additional return to shareholders of up to £4.5bn.
Gin sales boosted the global spirits group’s full-year sales. Both Gordon’s and Tanqueray saw double digit sales growth, and ready to drink premix can sales grew 17 per cent.
What Diageo said
Ivan Menezes, Diageo chief executive said: “Diageo has delivered another year of strong performance.
“Organic volume and net sales growth was broad based across regions and categories, with new product innovation being a strong contributor.
“We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth.”
What analysts said
Ian Forrest, investment research analyst at The Share Centre, said: “These figures from Diageo again demonstrated the strength of its global business and its ability to generate cash, which can be invested or returned to shareholders. The shares dropped back slightly in early trading, but that is probably just some profit-taking given that they’ve outperformed the market over the past year.
“We continue to recommend Diageo as a Buy because of the strength and variety of its brands, excellent long-term prospects in emerging markets and the support provided by good cash flow and the large capital return programme.”