28th Jan 2016 07:12
LONDON (Alliance News) - Drinks giant Diageo PLC on Thursday said its pretax profit edged up in the first half thanks to better margins and organic growth, though currency weakness meant revenue dipped.
The FTSE 100-listed group, which owns Smirnoff vodka, Jack Daniels bourbon and Guinness stout, said its pretax profit for the half to the end of December was GBP1.78 billion, compared to GBP1.64 billion a year earlier.
Revenue dipped to GBP8.27 billion from GBP8.73 billion in the half, with currency holding back growth and challenging conditions continuing in certain markets, particularly emerging markets.
Organic net sales growth in the half, however, was 1.8%, with volume growth of 1.0% overall, while the group's organic operating margins improved thanks to cost improvements in the business and a good performance from its key brands.
Diageo said it would pay a dividend for the half of 22.6 pence, up 5.0% year-on-year.
"For the full year we expect volume growth to drive stronger top line performance, margin to slightly improve and strong cash conversion to continue," said Chief Executive Ivan Menezes. He added this will set the group up to deliver better growth in its 2017 financial year, with productivity improvements to support its margin expansion and further investments in its growth plans.
By Sam Unsted; [email protected]; @SamUAtAlliance
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