Diageo to reallocate marketing spend to underinvested brands to drive 'future profit'

Weakness Of The Pound Helps Diageo Beat Estimates

The company reported a 28 percent rise in operating profit for the first half of its fiscal year on Thursday morning and a hike in its dividend. The positive report reflects accelerated organic growth and a favorable exchange rate.

Operating profit, which excludes exceptional items, in the half year increased to GBP2.07 billion from GBP1.72 billion, boosted by a 339 basis points improvement in operating margin. In Europe, net sales were up 5 per cent with Continental Europe the main contributor.

Menezes also said that while Smirnoff was Diageo's only "Global Giant" brand to decline in H1 - impacted by price hikes in the USA - he expects the vodka to return to growth "over the next few quarters".

North America delivered net sales growth of 3 percent, while USA spirits net sales were up by 4 percent.

Spirits giant Diageo has reported a better than expected rise in sales helped by improvements in its United States business and its Scotch portfolio. Good sales of white spirits and scotch in Asia Pacific offset the continued contraction of the local whiskey market in Korea. Growth was driven by reserve variants, which were up by 11%.

Guinness net sales were up 2 per cent supported by a solid performance of Hop House 13 Lager and Tanqueray, which grew net sales double digit in most countries across Europe.

Diageo's Scotch brands account for more than 25% of the company's sales and grew 6% during the six-month period, an improvement over the previous year's 1% sales gain of its Scotch portfolio.

Ivan Menezes, who has faced persistent questions over his tenure as chief executive, said the hard work of the past three years was turning Diageo into a "stronger, more consistent, better-performing company" that was quicker on its feet and able to generate higher returns.

Menezes said: "We are identifying consumer trends faster, expanding the reach of our products across markets and developing trade channels to capture these growth opportunities".

"Our productivity work is on track, driving efficiency and effectiveness across the business".

"Our expectations of delivering a stronger financial performance this year are unchanged".

Related news:

Hot News

isis-killer-beheading-video-story-top Middlesbrough confirms Atlanta United signs USA goalkeeper Brad Guzan
Jan 27, 2017 - 00:56
After starting his career with Chivas USA, Guzan has spent the past nine seasons in the Premier League, mostly with Aston Villa. Currently United's roster features two goalkeepers: former Kansas City keeper Alec Kann and Greek keeper Alexandros Tabakis.

isis-killer-beheading-video-story-top America's Favorite Local TV News Producer Has Died
Jan 27, 2017 - 00:53
"Outside of her family, I don't think there was anyone more proud of her than I was", he told The Hollywood Reporter . Betty White , Moore's co-star from the sitcom, Mary Tyler Moore spoke about her friend's deteriorating health.

isis-killer-beheading-video-story-top Thousands of protesters expected in Philadelphia amid Trump visit
Jan 27, 2017 - 00:53
The president's visit to the GOP retreat, along with Vice President Mike Pence, also will showcase the budding partnership of Mr. British Prime Minister Theresa May will be the first foreign leader to meet with President Trump since he took office.

isis-killer-beheading-video-story-top Boeing's Big Dreamliner Is Finally Starting to Fuel Profits
Jan 27, 2017 - 00:52
Finally, USS Investment Management Ltd boosted its position in Boeing Company (The) by 24.7% in the second quarter. Earnings per share of $2.59 beat expectations of $2.39 from analysts polled by S&P Global Market Intelligence.

isis-killer-beheading-video-story-top Dwyane Wade, Jimmy Butler Rip Into Bulls Teammates Amid Chicago's Slump
Jan 27, 2017 - 00:51
Bulls guard Dwyane Wade shoots the ball against Atlanta Hawks forward Kent Bazemore during the second half at the United Center. Wade was also highly critical of his teammates, and he didn't mince words when talking with reporters at the end of the game.

isis-killer-beheading-video-story-top USDA disavows gag-order emailed to scientific research unit
Jan 26, 2017 - 00:45
An Agriculture Department research agency has banned the release of news releases, photos and other material to the public. The ARS focuses on scientific research into the main issues facing agriculture, including long-term climate change.

isis-killer-beheading-video-story-top Cervical Cancer Deadlier Than Previously Thought: US Sees Higher Death Rates
Jan 26, 2017 - 00:41
Screening for cervical cancer involves collecting a sample of these cells for analysis to check for any abnormal cells. The study also identified the gene BCAR4 as a potential target for cervical cancers with that mutation.

isis-killer-beheading-video-story-top Rio Tinto sale to Yancoal resets mood for Australian coal mine deals
Jan 26, 2017 - 00:39
The mines produced a total of 25.9 million tonnes of coal in 2016, of which Rio's share was 17.1 million tonnes. Hunter Hillcoat, analyst at Investec, said Rio had achieved a "good premium" to Coal & Allied's book value.

Horizon Zero Dawn PS4 Bundle confirmed for Europe
Jan 26, 2017 - 00:39
With so much content packed into the game's open-world, players could need a lot of time to unlock and access it all. Microtransactions are initially out of the game but it does not mean that Guerilla will not include the feature.

isis-killer-beheading-video-story-top NAR: Existing-Home Sales In 2016 Reached Highest Rate In A Decade
Jan 25, 2017 - 10:59
The U.S. median - or middle - sale price for an existing home was $232,200 in December, up 4 percent from a year before. Last month, sales of previously owned homes fell 6.2 percent in the Northeast and declined 4.8 percent in the West.

isis-killer-beheading-video-story-top Trump calls Georgia Gov. after deadly storms
Jan 24, 2017 - 00:52
Multiple rounds of severe weather are expected in the Auburn area between Saturday and Sunday mornings, including this round. Georgia was the worst hit with 14 people killed including seven who died when a tornado ripped through a mobile home park.

isis-killer-beheading-video-story-top SRK is all praise for his Raees co-star Mahira Khan
Jan 24, 2017 - 00:45
Just because it's a film? She also talks about how she was inspired by her father, who was also a driver, to take up the job. SRK is seen lip-syncing one of Rabindranath Tagore's famous compositions - Ogo Bideshini - as he is onboard a Tram in Bengal.

Sitting for more than 10 hours daily ages you faster, study warns
Jan 23, 2017 - 00:54
Shadyab and team examined the association between LTL and sedentary time using multiple linear regression models. They protect chromosomes from deterioration and progressively shorten with age, increasing the risk of disease.

isis-killer-beheading-video-story-top Deadly Tornado Strikes Hattiesburg, Miss. Causing 'Extensive Damage'
Jan 23, 2017 - 00:31
A large part of Arkansas was under a tornado watch, and forecasters warned that severe storms could develop in the evening. The National Weather Service said 3 to 5 inches of rain had already fallen, raising the risk of flooding.

isis-killer-beheading-video-story-top The Obamas reveal what's next for them in new video
Jan 22, 2017 - 00:53
Yet Trump still insists on holding on to his iconic pre-presidential Twitter account, despite pleas to give it up. Barack Obama has stepped down as president and is heading off for a brief vacation as a private citizen.