Diageo pins hopes on brand loyalty
Friday 29 August 2008
Global drinks giant Diageo lowered its growth forecast yesterday against a background of rising costs and a slowing global economy, as it delivered flat full-year pre-tax profits.
However, the company toasted a strong performance from its biggest brands,including Guinness, Smirnoff vodka and Johnnie Walker,as global consumers refuse to sacrifice their favourite tipples.
Diageo's chief executive, Paul Walsh, said: "Although times are challenging, they want brands they can trust so [strong] brands will prevail. The performance of our brands is very healthy."
The company tweaked its guidance for operating profit growth for the current financial year to between 7 per cent and 9 per cent, revised down from 9 per cent previously. Analysts at Cazenove said they believe the upper end of this range is "optimistic", given the slowdown in global economic growth, but the lower end of the range is "realistic".
Diageo said its input costs rose 3 per cent for the year to 30 June, and it expects them to rise 5 per cent, or £150m, in the current financial year.
Nick Rose, Diageo's finance director, said: "Some things such as barley and corn are up dramatically, but some things have hardly moved."
For the year to 30 June,Diageo delivered flat pre-tax profits of £2.09bn, on sales that jumped 7 per cent to £10.64bn.
Of its key brands, Johnnie Walker sales grew by a tasty 12 per cent, Smirnoff vodka by 10 per cent and Guinness was up by 6 per cent.
Mr Walsh said: "With Guinness, we have outperformed the UK and Irish beer market and we have shown strong growth in Africa."
Shares in Diageo rose 20.5p to end at £10.
- 1 What happens to your body when you give up sugar?
- 3 Japanese island overrun with cats after population explodes
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
California teacher appears to have hanged herself in her classroom
The City of the Monkey God: Archaeologists claim to have found city lost for 1,000 years in remote Honduran jungle
Ed Miliband deemed less influential than One Direction's Louis Tomlinson by official Doncaster power list
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...