Diageo profits rise on price hikes and growing taste for premium tipples
The spirits giant posted a 7% rise in pre-tax profits to £4.7 billion for the year to June 30, up from £4.4 billion the previous year.
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Johnnie Walker and Smirnoff owner Diageo has seen full-year profits boosted by price rises and as drinkers switch to more expensive brands.
The spirits giant posted a 7% rise in pre-tax profits to £4.7 billion for the year to June 30, up from £4.4 billion the previous year.
Operating profits lifted to £4.6 billion from £4.4 billion as the group said it offset falling sales by volume with price increases and a trend for drinkers to trade up to more premium tipples.
It said organic net sales lifted 6.5%, while sales by volume fell 0.8%.
The group has been raising prices to counter cost pressures across its global markets.
New chief executive Debra Crew, who took over in June when former long-standing boss Sir Ivan Menezes died aged 63, said: “Looking ahead to fiscal 24, I expect operating environment challenges to persist, with continued cost pressure and ongoing geopolitical and macroeconomic uncertainty.
“This requires us to move with greater speed and agility.
“In a challenging, albeit moderating, inflationary environment, we will continue to focus on revenue growth management, including strategic pricing actions and everyday efficiency.”
Ms Crew – who was formerly chief operating officer – added she was “proud of how our Diageo family has come together in recent weeks following the loss of our much loved and respected former CEO, Sir Ivan Menezes”.
Sir Ivan had been chief executive for 10 years at the multinational company, where he had a 25-year career.
Shares lifted 2% after Diageo’s results.
It said it expects organic earnings growth to improve over the first half of 2023-24 and “accelerate gradually” over the remainder of the financial year.
Diageo’s figures come amid a legal battle with US rap star Sean “Diddy” Combs after he sued the company over allegations of racism over how it handled his liquor brands.
The firm has denied Combs’ racism allegations, saying the issue is a “business dispute”.