Diageo has described its performance in its home market as strategic, rather than one of vanity and has outlined concerns for rising commodity input cost pressures.

Speaking to just-drinks today (30 August), when asked how important it was for a UK-based company to perform well in its home market, Diageo CEO Paul Walsh said: "I don't make irrational investment decisions just to look good in the UK. It's nice, but it's not essential. Besides, we have more shareholders in the US than in the UK."

The global drinks giant also outlined its concerns for rising input cost pressures potentially hindering future growth.

Diageo CFO Nick Rose said: "We are feeling increased inflammatory pressure. Our supply organisations have track records of offsetting, but it's a huge task for them to grapple with. We may see, in the future, some net costs rising. The price of barley, corn, malt, glass and aluminium rate increases. All of this is factored into our guidance, but it's going to be a tougher year."

Also today, Diageo reported operating profit for the 12 months to the end of June increased by 6% year-on-year, reaching GBP2.16bn (US$4.33bn). Net sales in the period were up by 3% GBP7.5bn.

Net profit, however, slipped to GBP1.55bn from GBP1.96bn in 2005-2006, as the tax rate between the two periods increased from 8% to 32%.

In volume terms, sales were up by 6% to 141.3m of equivalent units.