Drinks giant Diageo boosts sales and profits
Drinks conglomerate Diageo boosted both profit and sales in the first-half of its financial year and announced a £660m share buyback.
The maker of drink brands such as Smirnoff vodka and Johnnie Walker whisky, said net sales increased 5.8 per cent to £6.9bn with organic growth partially offset by unfavourable exchange.
Reported operating profit was up 11 per cent to £2.4bn which Diageo said was driven by organic growth.
Cash flow from operating activities was £1.6bn, up £356m, and free cash flow was £1.3bn, up £317m.
Interim dividend increased five per cent to 26.1 pence per share, and the company also announced a £660m share buyback, brining its total programme up to £3bn for the year ending 30 June.
Chief executive Ivan Menezes said: “Diageo delivered broad-based volume and organic net sales growth across regions and categories. We continue to expand organic operating margins while increasing investment in our brands ahead of organic net sales growth.
“These results are further evidence of the changes we have made in Diageo to put the consumer at the heart of our business, to embed productivity and to act with agility to enable us to win sustainably.
“This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year and to expand operating margins in line with our previous guidance of 175 bps for the three years ending 30 June 2019.”
Diageo shares rose 4.15 per cent to 2,887p this morning.