Business
Profit rises at Diageo despite shaky sales in drinks sectorSimeon Goldstein, 12 February 2009Be the first to comment on this article Drinks giant Diageo has said it benefited from acquisitions and favourable exchange rates to put in a “resilient” performance in the first half of the financial year in the face of declining consumer demand. The company recorded an 18% increase in net sales – after excise duties – in the six months to 31 December. Pre-tax profit rose to £1.4bn, up 3% on the same period in 2007. Chief executive Paul Walsh admitted the economic downturn “had affected business”, but said the results were testament to the “resilience we have from our brand range”. In Europe, Diageo was hit by a decline in alcohol consumption and more people choosing to drink at home. Nonetheless, operating profit for the period rose by 5%. British beer consumption fell and offset a strong performance in spirits, the firm said. Net sales fell by 1%. For the second half of the year, Diageo said it was looking to restructure the business and continue to invest in marketing. It forecasted a 4% to 6% increase in operating profit for the year. Nonetheless, Walsh was cautious about what would happen in the remainder of the year. “Current economic conditions indicate that consumer confidence will reduce further and the outlook for the second half is more difficult to predict,” he added. Diageo owns many of the world’s largest drinks brands, including Guinness, Johnnie Walker and Smirnoff. Speak Your Mind |
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