Member Article

Diageo announces strong growth

Diageo is getting stronger, according to the drinks company’s interim results released on Thursday morning.

The organisation, which owns world-famous drinks brands such as Smirnoff vodka, Guinness and Captain Morgans, posted organic net sales growth of 5%, while organic operating profit was up by 9%.

Rapidly growing markets accounted for 42% of Diageo’s net sales in the six months ending 31st December, and delivered operating profit growth of 21%.

Acquisitions made in the past two years brought in an additional £0.3bn net sales in the half, while the firm increased its interim dividend by 9%.

Commenting, Paul S Walsh, chief executive, said: “These results reflect the global strength of our strategic brands, our leadership in the US spirits market and our increasing presence in the fastest growing markets of the world.

“Our expanding reach to emerging middle class consumers in faster growing markets was the key driver of our volume growth, while net sales growth was driven by our pricing strategy and premiumisation, especially in the US.

“This drove gross margin expansion, which together with our continued focus on operating efficiencies, delivered operating margin improvement.

“This is a strong set of results, confirming our medium term guidance and supporting our decision to increase the interim dividend by 9%.”

Diageo announced its interim dividend at 18.1 pence per share, up from 16.6 pence in the first half of 2012.

This was posted in Bdaily's Members' News section by Miranda Dobson .