Alcoholic beverage maker Diageo (DGE) has announced a £2bn share buyback programme alongside its full-year results, an increase on the £1.5bn-worth repurchased during the past year. Chief executive Ivan Menezes said this round of buybacks follows strong cash flow generation over the period, even if said cash flow contracted by 5 per cent to £2.5bn due to a higher level of operating working capital.
Gin continues to be a popular drink in the UK. Net sales in the UK were up 8 per cent during the year, driven by double-digit sales growth in Tanqueray and the launch of Gordon’s pink variety. Guinness – another UK staple – saw net sales increase 8 per cent thanks to the popularity of its draft beer and the Hop House 13 lager.
In North America, market share gains made by whiskey brands Crown Royal and Bulleit, combined with 37 per cent net sales growth from Don Julio tequila drove a 3 per cent increase in spirits sales. Double-digit organic net sales growth in ready-to-drink options such as Smirnoff Ice also helped the Diageo beer company increase its sales by 5 per cent, compensating for a decline in beer.
Analysts at Liberum expect EPS of 120p in the year to June 2019, increasing to 127p by FY2020.
| DIAGEO (DGE) | ||||
| ORD PRICE: | 2,822p | MARKET VALUE: | £ 69.5bn | |
| TOUCH: | 2,822-2,823p | 12-MONTH HIGH: | 2,885p | LOW: 2,257p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 404p* | NET DEBT: | 77% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 10.3 | 2.71 | 93.0 | 51.7 |
| 2015 | 10.8 | 2.93 | 95.0 | 56.4 |
| 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 |
| % change | +2 | +5 | +12 | +5 |
| Ex-div: | 09 Aug | |||
| Payment: | 04 Oct | |||
| Includes £12.6bn of intangible assets or 511p a share | ||||
