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Diageo – Poised For Nightclub Renaissance

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.

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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.”


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver