par siddharth cavale
BANGALORE (Reuters) – British spirits group Diageo said on Thursday there was a surprising increase in sales in the first half of this year as strong demand from US retailers offset the decline of bars and restaurants in Europe.
Whiskey makers Johnny Walker and Vodka Smirnoff raised their interim dividend by 2% to 27.96 pence, up 4% to 2,963 pence on the London Stock Exchange this morning.
The group’s profits, which make up almost 45%, are strong during epidemics for the world’s largest spirits maker, with 80% sold in retail stores.
“Growth in North America is driven by flexible consumer demand (…) and is being restarted by distributors and retailers,” the panel said.
In Europe and Turkey, Diageo’s net sales fell 10%. In Latin America and the Caribbean, they fell 1%, while in the Asia-Pacific they fell 3%.
Diageo reported a 1% organic increase in net sales worldwide for the six months ended December 30, while analysts expect a 4.6% decline, according to estimates provided by the company.
Adjusted profits fell nearly 13% to 69.9 pence per share – higher operating costs and penalties for a stronger pound – however, a figure above consensus (67.8 pence).
“We need to make corrections. This morning Diageo released incredibly reversible H1 results, which are better than expected at all levels,” Bernstein’s analyst Trevor Sterling said in a note.
The committee did not provide a revenue forecast for this year. However, he said he expects sales growth in all regions in the second half of the year, in terms of positive comparisons compared to the previous year, strong pace in North America and the reopening of bars and restaurants in other regions.
“We expect volatility and further disruption in the second half of the year, especially in the food service sector, which will make performance even more difficult,” Group CEO Evan Menises said in a statement.
(Siddharth Kavale, French edition Kate Entringer)