Diageo, the British alcoholic beverages company, has posted a 32% rise in full-year profits as a dip in sales across Europe was offset by emerging markets.
The drinks giant reported pre-tax profits in the year to the end of June rose to £3.12 billion, up from £2.36 billion in the previous year, on revenue up 10% to £14.6 billion. The largest producer of Scotch whisky also raised its final dividend by 8% 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.
Chief executive Paul Walsh, 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.”
The CEO pointed out that middle class in the emerging markets would continue to drive the company’s growth in future.
Operating profits in Asia, Africa and South America rose 18%, 20%, and 22% respectively. In the US, where Johnnie Walker sales were strong, it increased 6%. Sales of Scotch grew 12%, while that of Johnnie Walker rose 15%.
Although Diageo’s net sales fell 1% in Europe, operating profits rose 3% due to strong sales in emerging markets like Russia, Eastern Europe, and Turkey, and offset weakness in Southern Europe caused by the eurozone debt crisis.
It may be noted that earlier this year Diageo had announced that it would invest more than £1 billion into Scotch whisky production to meet the growing whisky demand across the world.