Shareholders in drinks giant Diageo are set to receive billions of pounds in share buybacks as the firm’s Covid recovery enabled the restart of its return of capital programme.
Diageo, the owner of Guinness and Smirnoff, this morning said it was restarting its capital return programme after a strong financial recovery, led by North America.
Delivering a trading update, the alcohol maker also said it expected organic operating profit growth to hit at least 14 per cent in its current fiscal year.
Following the update, shares in Diageo rose by more than three per cent as markets opened.
The FTSE 100 company started the second part of its return of capital plan of up to £1bn and expects to buy back shares from today after pausing it last year due to the pandemic.
Ivan Menezes, chief executive of Diageo, said: “I am very pleased with how our business is recovering in fiscal 21, our strong competitive performance across key markets and our robust cash generation.
“When we have excess cash, we have been clear that we will seek to return it to shareholders. The Board’s decision to resume our return of capital programme at this time reflects Diageo’s improved performance in the first half of fiscal 21, the continued strong recovery of our business.”