Diageo plc (LON:DGE)’s full year net sales rose 16% to £12.7bn, on an organic basis. That reflects growth in all regions, and the effect of easier comparisons from last year’s disruption. Underlying operating profit rose faster than sales, increasing 18% to £3.7bn.
The group intends to pay a final dividend of 44.59p per share, an increase of 5% on last year, and takes the full year payment to 72.55p.
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Diageo expects organic net sales growth to continue into the next financial year, and for North America to return to pre-pandemic growth levels. However, the group also warned that near-term volatility is expected.
The shares fell 2.1% following the announcement.
Diageo Recouped Some Of Its Losses
Sophie Lund-Yates, Senior Equity Analyst at Hargreaves Lansdown:
“As the maker of Smirnoff, Guinness and Gordan’s it comes as no surprise that the shuttering of bars and night clubs left Diageo with a nasty hangover of problems. However, the strength of the group’s brands means it was able to recoup some of its losses through a huge increase in supermarket trade in some key markets, and it’s come out of the pandemic in remarkably resilient shape. It’s now poised to make the most of the re-opening of Europe’s bar and nightclub scene.
Something to keep in mind is the volume of footfall in bars and nightclubs. There’s certainly excitement about re-opening, we’ve all seen the early queues, but there’s also a have-fun-at-home sentiment that’s been bred by lockdowns. It’s possible this could see a permanent reduction in the number of feet on dancefloors as things get back to normal, which could see the likes of Diageo face a headwind.”
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