Diageo misses target and pins hopes on new markets

Diageo, the world's biggest spirits group, expects higher profit growth this year due to a growing recovery in its key emerging markets after it missed forecasts with a nine per cent rise in half-year earnings.

The maker of Smirnoff vodka, Johnnie Walker whisky and Guinness beer said despite a weaker performance in Europe, it is being helped by better trading in Latin America, Africa and Asia and an improved performance in North America.

"Despite the economic weakness in much of Europe, our first half performance gives me increased confidence that we will improve on the organic operating profit growth we deliver in fiscal 2010," Chief Executive Paul Walsh said in a results statement.

The group posted earnings up 9 percent at 48.2 pence a share for the half-year to end-December, missing a consensus of 50.6 pence according to a company-compiled consensus of 49.6p, compared with 44.2p the previous first-half.

The half-year dividend rose 6 percent to 15.5 pence a share.