Investors cheer higher profits at drinks giant

Shares in beer and spirits giant Diageo enjoyed a healthy froth yesterday after the group revealed a jump in pre-tax profits.

Preliminary results for the year to June 30 show the group, which is one of Fife’s largest private sector employers, generated sales of £18.11 billion over the last 12 months, up from £15.6bn in 2016.

Pre-tax profits came in at £3.55bn, up from £2.85bn a year earlier while profit for the year was £2.77bn.

The company owns some of the world’s most recognisable drink brands including Smirnoff vodka, Tanqueray gin, Baileys, Johnnie Walker whisky and Guinness.

It has a strong presence in Fife as operator of the Cameronbridge distillery, Leven bottling plant and the newly established Cluny bond near Kirkcaldy, where spirits are laid down for maturation.

The company said its performance had been underpinned by organic net sales growth seen across all of its operational regions, with volumes also up 1.1%

The group declared an increase in the final dividend of 5%, bringing its full year payout to 62.2p per share.

It also announced it was commencing a new £1.5bn share buyback programme, which will return cash to investors.

CEO Ivan Menezes said Diageo was a “strong company” and was confident it would continue to grow.

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

Whisky barrels being moved between warehouses at Diageo’s Cluny bond in Fife.