30th Jan 2020 08:30
(Alliance News) - Johnnie Walker whisky maker Diageo PLC on Thursday upped its interim dividend by 5% after reporting a consistent set of first half results, with broad-based organic sales growth across regions and categories.
The FTSE 100 brewer and distiller, however, warned that full-year organic net sales growth will be towards the lower end of its mid-term guidance range of 4% to 6% due to changes it is making in the business following increased levels of volatility.
Diageo shares in London were up 1.5% at 3,157.20 pence each on Thursday morning.
For the six months to December 31, Diageo recorded pretax profit of GBP2.46 billion, down 6.2% from GBP2.63 billion a year ago. This was largely due to a non-repeating GBP146 million gain received in the year-earlier period, which mainly related to the sale of a portfolio of 19 brands.
First half sales rose to GBP10.83 billion from GBP10.36 billion a year ago. Net sales grew 4.2% to GBP7.2 billion, also up 4.2% on an organic basis. Volume on an organic basis was up 0.2%. Organic operating profit grew ahead of net sales, the company noted, up 4.6%.
North America delivered net sales growth of 6% in the first half, while Europe & Turkey recorded organic net sales growth of 3%. Africa saw organic net sales growth of 5% and Latin America & Caribbean 2%. Asia Pacific posted 4% growth by the same measure.
London-based Diageo lifted its interim dividend 5.0% to 27.41p per share from 26.10p.
"These results reflect the changes we are making in the business to drive shifts in our culture. They are in line with our current mid-term guidance and have been delivered in the face of increased levels of volatility in India, Latin America and Caribbean and Travel Retail," said Chief Executive Ivan Menezes.
"For the full year, we therefore expect organic net sales growth to be towards the lower end of our 4 to 6% mid-term guidance range," he continued. "We continue to expect organic operating profit to grow roughly one percentage point ahead of organic net sales."
By Tapan Panchal; [email protected]
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