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.
|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)|
|*Includes intangible assets of £11.3m or 483p a share|