In good spirits: Diageo shares rise after Guinness owner forecasts sales growth
Guinness owner Diageo has said it expects organic net sales growth of at least 16 per cent in the first half of its new financial year.
The announcement sent shares in the alcohol giant rocketing more than 3 per cent on Tuesday morning, to a high of £39.48.
At its capital markets day, the beverage-maker set out plans for a 50 per cent increase in its share of the alcoholic drinks market by the end of the decade. It hopes to see its share increase from four per cent in 2020 to six per cent by 2030.
Chief executive, Ivan Menezes, said: “In fiscal 21, despite the challenges created by Covid-19, we delivered strong organic net sales growth, drove an improvement in organic operating margin and delivered strong cash flows, while continuing to invest in long-term sustainable growth.”
Diageo – which oversees household names such as Johnnie Walker and Baileys – forecast sales growth between 5 per cent and 7 per cent in 2023-25.
It anticipated sales growth would amp up to 9 per cent by the end of the 20225 financial year.
The company was benefiting from “resilience” in the off-trade and “continued recovery” in the on-trade, amid a “strong start” to the 2022 financial year.
“We expect the strong growth momentum in the first half of fiscal 22 to continue through the remainder of the fiscal year. However, in the second half of fiscal 22 we will be lapping a tougher comparator,” Diageo’s chief financial officer, Lavanya Chandrashekar, said.