Diageo may have accelerated the trend for silly corporate christenings when it was spawned from the merger of Guinness and GrandMet in 1997. But aside from the name, there is nothing silly about the world's biggest drinks group.
Its drinks cabinet reads like a barman's birthday wish list, leaving Paul Walsh, the chief executive, with no excuse not to concoct killer profits cocktails come results time. In Smirnoff vodka, Guinness stout, Baileys liqueur, Cuervo tequila and Johnnie Walker scotch, it has the best-selling brands in each category.
The good news in yesterday's full-year trading update was that volumes of these brands had improved in the second half, with special toasts for Smirnoff and Captain Morgan. It acquired the rum after swallowing Seagram's drinks portfolio in a transforming deal back in 2001.
Despite a weak economic backdrop, which has caused fellow consumer-facing companies from Heineken to Unilever to choke on recent numbers, trading in the US was robust, with Diageo claiming its star brands had done particularly well. A recent overhaul of its US distribution chain should start bearing fruit from next year.
Less palatable was confirmation that the fizz has gone out of the alcopop market. Volumes of drinks such as Smirnoff Ice and Archers Aqua - dubbed "ready to drink" or RTDs in the trade - will be up just 5 per cent this year. And this from a category hailed just over a year ago as the best news for the industry since the US ended prohibition. In the US, RTD volumes will be down by 12 per cent, while in the UK they will be 3 per cent lower, notwithstanding a successful launch of Black Ice, the less sickly sweet brother to Smirnoff Ice.
And the hangover-inducing chaser in yesterday's update was Diageo's admission that the second six months of the year added nothing to its first-half performance. Organic operating profit growth would only marginally improve on the 6 per cent in the first half. This is well off the double-digit jump initially targeted.
The shares, up 10.5p to 647.5p, have recovered in the past few months, but are off 15 per cent from the level this column thought toppy 18 months ago. With even quality consumer companies struggling, the shares are best left on the shelf until the outlook picks up.
Reg Vardy shifts back into gear
The Brits want to change their car every couple of years. That won't change, they won't start to copy the continental Europeans and hold on to their vehicles for longer. If they have less money to spend, they'll just buy a cheaper model or a second-hand car.
This is Sir Peter Vardy explaining why we were so very wrong to tell readers to avoid shares in his car dealership, Reg Vardy, when we last reviewed their prospects in January. The stock is up 40 per cent since then.
The anticipated slowdown in consumer spending that was getting everyone nervous has not materialised - yet - and new car sales are still at roughly the same level as last year's record, defying industry forecasts of a 5 to 10 per cent downturn. Reg Vardy's group sales in May and June are running up 11 per cent.
Sir Peter may still be proved over-optimistic on the prospects for sales as consumers start to spend less or when, in due course, interest rates start to rise. But there are other reasons for believing the share price gains of the past few months can at least be held.
Chief among these is the effect of changed European competition rules, coming into force in October, which shift the balance of power in the relationship between manufacturers and dealerships. The longer, tighter contracts that have been drawn up as a result mean dealers can no longer be held to ransom by the car makers. The sector should now operate more like it does in the US, where dealership shares are much more highly rated by stock markets.
Reg Vardy's full-year figures yesterday showed it has the organisational structure and the finances to grow its 78 outlets to its target of 100 and beyond, as the regulatory shake-up favours the bigger players. The shares, up 12.5p to 443.5p, do look worth holding.
Geest ripe if you're prepared for risk
You are very busy. Certainly too busy to do your own baking or make your own pizza; probably too busy to prepare an evening meal; maybe too busy even to wash your salad. Geest does it all for you. Or more accurately, does it for all the major supermarkets, whose own brand readymeals and prepared salads have been growing in popularity as lifestyles change.
So Geest should have a pretty impressive growth story to tell even though supermarkets are notoriously hard task masters when it comes to demanding value for money from their suppliers.
Unfortunately, there was such a serious disappointment last year - when salad sales fell short of expectations for a variety of reasons including the weather - that Geest has struggled to get a hearing in the City ever since. A trading update yesterday went a step further in restoring confidence, but investors will be wary for a while yet.
Sales growth in the six months just ended will be 10 per cent, Geest said, although a greater than expected proportion of that comes through acquisitions and expansion of its modest presence in continental Europe. There will also be clear growth in operating profits, too, although the group is increasing capital expenditure so analysts did not move their forecasts higher.
The capex increase was taken as a good sign, since the company insists it has been forced to increase factory capacity on the back of strong demand for freshly prepared foods. Geest shares rose 4p to 473p as a result.
The stock is on a multiple of 11 times earnings forecasts for the current year. Assuming that earnings can begin to grow again next year, that multiple looks too low. Investors who have the appetite for a bit of risk will find the shares tasty.