Vodka is out of fashion while gin keeps soaring

DRINKS giant Diageo toasted a surge in profits as the gin boom continued.

The firm, which makes Gordon’s and Tanqueray, said sales of the spirit rose 16pc in the year to June 30.

It was one of the star performers, lifting profits by nearly 5pc to £3.7bn.

However, the rise offset the waning popularity of vodka, with sales of Smirnoff down 2pc.

Gin sales were particularly strong in the UK and Europe, as high-end gin has surged in popularity, with official statistics showing Britons spent £461m on the spirit last year. The craze also propelled half-year sales higher at tonic maker Fevertree earlier this week.

Alongside its full-year results, Diageo also announced a windfall for investors by unveiling a £2bn share buyback.

But the group saw shares fall around 1pc as investors looked to take profits.

Chris Wickham, consumer goods analyst at Equity Development, said: ‘Diageo finished its financial year able to raise a glass all round the world, as every region contributed positively to organic sales growth.’