Diageo, maker of Guinness and Baileys, has reported operating profit grew 17% in the first of its financial year but has reduced its growth targets for the full-year because of global economic uncertainty.
The brewer, which recently appointed Simon Litherland as the new managing director for Great Britain, says operating profit before exceptional items for the six months ended 31 December was £1.6bn, up from £1.4bn in the same period last year.
Group net sales after excise duties rose 18% to £5bn in the first-half.
However, the group cut its operating profit growth targets the full-year to 4-6% from the 7-9% previously stated due to the uncertainty about the “wider economic environment”.
Organic marketing spend dipped 1% because of “media rate deflation” and a reduction in ready to drink spend.
In Europe, net sales, operating profit and marketing spend all dipped, down 3, 4 and 4% respectively, driven by the “weak” Spanish and Western European beer market.
Guinness, celebrating its 250th anniversary this year, registered a 7% increase in total organic net sales but dipped 1% in volume sales.
Paul Walsh, chief executive of Diageo, says the company’s performance in the first-half demonstrated its “resilience”.Diageo reports 17% profits bump