Guinness and Baileys owner Diageo sees profits and sales soar as whisky and tequila drive growth

 
Alys Key
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Johnnie Walker whisky was one of the fastest-growing brands (Source: Getty)

Shares in drinks company Diageo were trading up six per cent this morning after it reported a 15 per cent increase in revenue.

The owner of Guinness, Smirnoff and Baileys took on George Clooney's tequila brand Casamigos last month but this was not included in the results as the deal has not been finalised.

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The figures

In the year to 30 June, Diageo grew sales to £12.1bn, while operating profit grew by 25 per cent to £3.6bn.

Organic operating profit growth performed above market expectations, at 5.6 per cent. Organic sales growth was 4.3 per cent.

As well as buying up Casamigos, Diageo disposed of several brands including Grand Marnier and Bushmills Irish whiskey. Slimming down the porfolio took £282m off the grand total of sales.

Shares in the group were up seven per cent to 2,4323p by mid-afternoon trading.

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Why it's interesting

Trends in drinks consumption drove volumes and sales totals across the world.

While stalwarts Guinness and Baileys remained steady, volumes of vodka were down two per cent. In North America, volumes of Cîroc were down 13 per cent.

The gin trend continued, with sales up 20 per cent. In North America, Bulleit sales were up a whopping 43 per cent, while Tanqueray also grew 43 per cent in Europe, Russia and Turkey.

Whisky was also strong. Johnnie Walker sales were up in every region, including a 23 per cent rise in Latin America and 34 per cent increase in Europe, Russia and Turkey.

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What the company said

Chief executive Ivan Menezes spoke about productivity in the company's portfolio.

"Our productivity work is delivering ahead of expectations allowing us to reinvest in our brands, drive margin improvement and generate consistent strong cash flow," he said.

"Through productivity we have embedded an everyday efficiency mind set in the business and with improved data and insight we are making faster, smarter decisions on investment choices."

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