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Diageo on track to deliver profit forecasts

From The Publican


Global drinks giant Diageo, which brews Guinness and produces Smirnoff vodka, said that despite the worldwide economic downturn it expects operating profits to grow by up to six per cent in the current financial year.

The London-headquartered group said that the nine months to March 31, 2009, had seen net sales remain flat on an organic basis, although in the last three months of this period such sales had fallen seven per cent.

Diageo said this was largely down to "planned stock reductions" in its US spirits and wine distributors.

The group's chief executive, Paul Walsh, warned that some of Diageo's markets were seeing significant trading declines, particularly Russia.

But he added that the actions taken to restructure the group would put it "in a position to emerge from this global downturn as an even stronger business".

Walsh said the board's view was that Diageo remained on track to deliver organic operating profit growth for the year to June 30, 2009, of between four and six per cent".

He added that the only material change in the financial position of the group was the liability regarding the interim dividend. Diageo said net assets were £4,192m at the end of March 2009, against £4,616m at the end of December last year.

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