The shuttering of pubs, bars and restaurants during lockdown has left drinks giant Diageo (DGE) with a sore head.
Indeed, net sales for the 12 months to June tumbled by 8.7 per cent to £1.1bn – worse than consensus expectations of a 7.3 per cent decline. And the picture was even starker further down the income statement. Impairment charges of £1.3bn pertaining to the group’s businesses in India, Nigeria, Ethiopia and Korea sent statutory earnings plummeting.
Chief executive Ivan Menezes called the period a “year of two halves”. Before the pandemic hit, the group had seen a “good, consistent performance”. But for the full year, North America was the only region to report an improvement. Here, good growth pre-crisis was only partly erased by the closure of out-of-home drinking holes in the second half – leading to a 2 per cent increase in overall organic net sales.
Conversely, in the Asia-Pacific region, net organic sales plunged by 16 per cent. Meanwhile, Africa endured a 13 per cent drop – hit by lower beer and scotch sales in Nigeria, and alcohol bans in South Africa.
FactSet estimates put EPS for FY2021 at 117p, rising to 132p in FY2022.
DIAGEO (DGE) | ||||
ORD PRICE: | 2,701p | MARKET VALUE: | £ 63.2bn | |
TOUCH: | 2,700-2,703p | 12-MONTH HIGH: | 3,625p | LOW: 2,200p |
DIVIDEND YIELD: | 2.6% | PE RATIO: | 45 | |
NET ASSET VALUE: | 289p* | NET DEBT: | 157% |
Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
2016 | 15.6 | 2.86 | 89.5 | 59.2 |
2017 | 18.1 | 3.56 | 108 | 62.2 |
2018 | 18.4 | 3.74 | 122 | 65.3 |
2019 | 19.3 | 4.24 | 131 | 68.6 |
2020 | 17.70 | 2.04 | 60.1 | 69.9 |
% change | -8 | -52 | -54 | +2 |
Ex-div: | 13 Aug | |||
Payment: | 08 Oct | |||
*Includes intangible assets of £11.3m or 483p a share |