Diageo profits jump on strong emerging market sales

By AGENCIES

DIAGEO, the maker of Johnnie Walker whisky and Guinness, reported a 32pc rise in full-year profits as emerging markets offset a fall in sales in Europe.

Pre-tax profits in the year to the end of June rose to £3.12bn, up from 2.36bn in the pervious year, on revenue up 10pc to £14.6bn.

Diageo also raised its final dividend by 8pc to 26.9p a share, payable on October 22. This takes the payout for the year to 43.5p, compared with 40.4p last time.

Paul Walsh, chief executive, said: "We have increased our presence in the faster growing markets of the world, through both acquisitions and strong organic growth. We have enhanced our leading brand positions globally, through effective marketing and industry leading innovation and we have strengthened our routes to market."He said a growing middle class in emerging markets around the world would continue to drive growth in the future.

Operating profits in Asia, Africa and South America rose 18pc, 20pc, and 22pc respectively. In the US, where Johnnie Walker sales were strong, it increased 6pc.

Although net sales fell 1pc in Europe, operating profits gained 3pc as strong scotch sales in the emerging markets of Russia, Eastern Europe and Turkey offset weakness in Southern Europe due to the eurozone debt crisis.

Earlier this year, Diageo said it would invest more than £1bn into boosting Scotch whisky production to take advantage of a “renaissance” in the centuries-old industry.