Diageo ‘confident’ ahead of full-year results
Leading drinks manufacturer Diageo today announced that it is managing to maintain its sales growth, despite what the company described as “tough trading conditions”.
In a trading statement today, the British-based group claimed that its size, geographic diversity, and world-famous brands have helped it to counter the economic downturn, which was compounded by the SARS crisis and the Iraq war in the second part of the financial year.
And although net sales are not expected to have moved on from the 4% that was achieved in the first half of the year, the full-year operating profit is expected to have improved slightly on the 6% increase witnessed in the first six months.
Diageo’s chief executive, Paul Walsh, said: “All consumer goods companies have faced an environment of declining consumer confidence and significant global events in the year. Despite these circumstances Diageo will deliver consistent performance in top and bottom line organic growth, continued growth in priority brands and improved share.”
Smirnoff and Guinness were particularly successful brands for the group, although ready-to-drink products such as Smirnoff Ice went off the boil, because of increased competition and excise duties.
The North American and British markets remained strong, as did growth in Africa and Australia.
Despite recent financial problems Diageo also noted strong free cash flow, largely thanks to selling off Interbrew and other assets.
Official results for the year to June 30 will be published at the beginning of September, but analysts in the city were reportedly relieved that the outlook for the second half of the financial year was particularly optimistic.
