Weakness in Korea and economic malaise in southern Europe meant sales and profit growth at drinks giant Diageo (DGE) were slightly below expectations for the full year.
Operating profit grew 8 per cent to £3.5bn on 5 per cent organic sales growth. Growth was fuelled by strong trading in North America and emerging markets, which now account for over two-fifths of revenues. Sales from the regions grew 5 per cent and 11 per cent, respectively, while operating profits increased by 9 per cent and 18 per cent.
Volume, price and mix improvements led to a 15 per cent rise in sales in Latin America and the Caribbean, as a slowdown in Brazil was offset by better trading elsewhere. Sales across Africa, Turkey and eastern Europe grew 10 per cent, but Asia was hit by weak trading in Korea where sales of whisky plummeted and the global travel category suffered due to subdued spending from Chinese travellers, resulting in just 3 per cent growth across the region.
Unsurprisingly, sales in Europe fell 4 per cent and profit there tumbled 7 per cent, driven by an 11 per cent decline in southern Europe and Ireland. Across the drinks categories, volumes of beer, wine and ready-to-drink beverages fell, with just spirits managing 2 per cent growth.
Investec expects pre-tax profit of £3.6bn in 2014, giving EPS of 109p.
| DIAGEO (DGE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,965p | MARKET VALUE: | £49.3bn | |
| TOUCH: | 1,964-1,966p | 12-MONTH HIGH: | 2,115p | LOW: 1,661p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 280p* | NET DEBT: | 103% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 9.31 | 1.99 | 64.5 | 36.1 |
| 2010 | 9.78 | 2.24 | 66.3 | 38.1 |
| 2011 | 9.94 | 2.36 | 76.2 | 40.4 |
| 2012 | 10.8 | 3.12 | 78.2 | 43.5 |
| 2013 | 11.4 | 3.12 | 99.3 | 47.4 |
| % change | +6 | - | +27 | +9 |
Ex-div: 14 Aug Payment: 3 Oct *Includes intangible assets of £9.05bn, or 360p a share | ||||
