Guinness proves to be good for Diageo

By Hamish Champ

- Last updated on GMT

Related tags Europe United kingdom International trade Diageo

Guinness producer Diageo has announced net sales for the year up eight per cent to £8.1bn.Driven primarily by growth in its international markets,...

Guinness producer Diageo has announced net sales for the year up eight per cent to £8.1bn.

Driven primarily by growth in its international markets, Diageo said pre-exceptional operating profits for the year to June 30, 2008, were up nine per cent to £2.3bn, with organic growth slightly lower at eight per cent.

Pre-tax profits were effectively flat at £2.1bn.

Volumes were up three per cent to 145m units and basic earnings per share rose seven per cent to 59.3p.

The group's performance in Europe was "better than last year", with net sales up three per cent from growth in the UK, Eastern Europe and Russia.

In Europe Diageo said a strong performance from the UK business accounted for nearly a fifth of the region's growth.

Guinness volumes were flat across the year and net sales were up three per cent as the brand outperformed in the UK and Ireland, thanks to factors such as new advertising campaigns and last year's cooler summer.

Guinness outperformed the UK beer market, Diageo said, despite the beer category worsening in the second half.

Net sales of the Black Stuff in the UK were up two per cent, and the brand recorded its "highest ever" share of the on-trade market.

Other brands to benefit from increased marketing in the UK were Smirnoff and Baileys, the group said.

Acknowledging the challenging trading conditions across its global markets, Diageo chief executive Paul Walsh said the group ended the year in a stronger position than it began it.

"Our financial results in recent years have mirrored the consistent improvement we have achieved in our business and we finish the year with a stronger business.

"We enter the new financial year facing slowing global GDP growth and more challenging global economic trends, but given the strength and diversity of Diageo's business we believe we can deliver organic operating profit growth for the coming year within our range of seven to nine per cent.

"Together with the expected positive impact of exchange rate movements on reported results and our share buyback programme this means we expect to deliver double-digit reported earnings per share growth."

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