UK: Analysts toast Diageo, but voice concern over UK
Diageo has reassured analysts after reporting FY numbers today
Analysts have been encouraged by a healthy set of full-year results from Diageo today, but voiced concern over its performance in the UK.
The group posted a 21.7% rise in operating profits today (23 August), boosted by a strong performance in emerging markets.
Analysts Investec noted that emerging market growth was "on track". But, it said it has "some concerns around the UK", pointing to an "implied" 6% drop in volumes. However, it noted that Easetern Europe "continues to motor" for the group, as the region registered a 16% jump in net sales.
The analysts noted that sales of Jose Cuervo Tequila, which Diageo distributes and has been eyeing to buy for some time, fell 5% in the year. This "suggests management will be eager to consolidate support around the brand in the short term," the note said.
Overall, Investec said that Diageo has "delivered on its promises" and an 8% increase in dividend is encouraging and "chimes with CEO Paul Walsh’s confidence that the business is very much ‘on track’ to deliver against medium-term guidance".
Analysts UBS said Diageo's medium-term guidance of 6% annual sales now looks "conservative". "We are comfortable with our 13 full-year forecast of +6.7% organic sales and +9.8% organic EBIT growth," it said in a note.
Environmental sustainability remains one of the most active areas for the global drinks industry. This year, just-drinks returns to the subject with four separate management briefings, one per sector....
In the second part of this management briefing, which looks at environmental sustainability in the brewing sector, Ben Cooper looks at the role played by sourcing ingredients locally....
Here's the third part of this month's management briefing, which looks at three of the world's largest brewers and their efforts in the environmental sustainability arena....
- Key trends for the alcohol category in 2017
- Key trends for the beer category in 2017 - Focus
- Interview Berry Bros & Rudd CEO Dan Jago - Part I
- Heineken 2012-2016 - results data
- Heineken goes from strength to strength - Analysis
- Beam Suntory revamps Bowmore whisky packaging
- Bacardi lines up Canadian bottling plant closure
- Pernod unveils new St Patrick's Day Jameson bottle
- Asahi Group lifts 2016 sales, profits
- Brown-Forman launches brand nutrition website
- Global vodka insights - market forecasts, product innovation and consumer trends
- Global gin insights - market forecasts, product innovation and consumer trends
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends
- Global Scotch insights - market forecasts, product innovation and consumer trends