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.
Q2 2021 hedge fund letters, conferences and more
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.
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.”
About Hargreaves Lansdown
Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
