Diageo's on-trade decline tempered by Guinness

Diageo has revealed a 9% increase in UK volumes and a 5% improvement in sales - but a single-digit decline in on-trade volumes despite the stabalisation of pub closures.

It said Guinness had grown its market share, despite the volume decreases, aided by the campaign celebrating the brand's 250th anniversary.

It helped Diageo's share of the UK's on-trade beer market reach a record 8%.

Unveiling its preliminary results, it said it had experienced a 6% increase in operating profit last year to £2.57bn, up from £2.14bn the year before.

It said the increase was off the back of a 5% improvement in sales, which rose from £9.31bn in 2009 to £9.78bn.

Paul Walsh, chief Executive of Diageo, said: "As expected this has been a year of challenges and opportunities.

"Our performance was much stronger in the second half than in the first: our performance in the developing markets drove overall growth while markets in North America and Europe remained weak.

"However, even though markets and categories have been affected in different ways and to differing degrees, we have been consistent in our focus to deliver growth and build a stronger business for the future

"The impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable.

"However, as we demonstrated this year, the global diversity of our business, together with the strength and range of our brands and the agility we have demonstrated gives us confidence that in fiscal 2011 we will be able to improve on the organic operating profit growth we have delivered this year."