just the preview – Diageo FY
On Thursday (27 August), Diageo will announce its full-year results.
Back in May, the drinks giant posted a slip in sales for the third quarter, but reiterated its forecast of operating profits growth for the full-year.
Below, we take a look at the highs and lows of the last three months for the UK-based company.
- In June, Diageo fully acquired Stirrings, the US premium cocktail mixer group. The company raised its stake in Stirrings from 20% to 100%, but financial details were not disclosed.
- Also in June, the company confirmed that Gilbert Ghostine, the current managing director of its Continental Europe division, will replace John Pollaers as managing director of Diageo Asia Pacific.
- Then, in July, Diageo dismissed a claim, made in a report by Bloomsberg that it would gain almost US$3bn from a US tax break. The story had suggested that the company would benefit from the emergency Troubled Asset Relief Program (TARP) approved by Congress last year. The firm rebuffed the report, claiming it "has never sought, and will not receive TARP funds".
- The long-running talks between Diageo and United Spirits, over a potential stake purchase by the UK-based company, continued throughout the quarter. Reports in July, however, suggested that United Spirits, part of India's UB Group, was in talks with several private equity firms over a potential stake buy.
- Over in Japan, Diageo looked to realign its distribution in the country during the quarter. The company, which secured an alliance with Kirin Holdings in the country in April, said that it was looking to "leverage the strengths " of its two primary Japanese distribution partners. As well as the JV with Kirin, Diageo also has a 50-50 partnership with Moet Hennessy in the country - MHD Diageo Moet Hennessy.
- Earlier this month, Diageo's Kenya-based subsidiary, East African Breweries Ltd, was stopped from buying a stake in a rival brewer of SABMiller in Tanzania, when the brewer secured a temporary court injunction to block the move. Last week, a High Court judge in London granted the injunction, which blocks East African Breweries from breaking its partnership with SABMiller-controlled Tanzania Breweries and investing in a rival brewer in the country.
- The biggest story of the quarter involving Diageo, however, was a bit closer to home for the London-based firm. The company's announcement back in July that it is planning to cut its workforce in Scotland has been the subject of much discussion in the country. The latest development came last week, when trade unions and politicians in Scotland suffered a setback in their campaign to stop the move, after an independent report said not all the threatened jobs can be saved. Consultancy group BDO Stoy Hayward has been asked to "go back and research more positive alternatives" to Diageo's job cuts plan, a source close to the situation told just-drinks on Thursday (20 August).
Pernod Ricard's share price has edged up after a set of resilient half-year results, but it all hangs on the next six months....
East African Breweries Ltd, the division of Diageo, has reported a 9% fall in net profits for its fiscal half-year, despite a rise in sales....
- Interview Berry Bros & Rudd CEO Dan Jago - Part I
- The threat of excess choice in beer is over-stated
- Key trends for the beer category in 2017 - Focus
- Key trends for the spirits sector in 2017 - Focus
- Key trends for the alcohol category in 2017
- Pernod Ricard's Method and Madness Irish whiskey
- Premium to counter mainstream in gin - research
- Bacardi lines up Canadian bottling plant closure
- Pernod unveils new St Patrick's Day Jameson bottle
- Asahi Group lifts 2016 sales, profits
- Global vodka insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Global gin insights - market forecasts, product innovation and consumer trends