I put some money on these and it went up few months ago. Pulled the money out and put it elsewhere. Is it worth putting more money on them now?

Diageo (Other OTC: DGEAF.PK - news) steps up to the bar on Thursday with full-year figures. The market is going for sales of £10.75bn for the spirits distiller and Guinness brewer, and profit before tax of £2.94bn. Investment analysts have pencilled in an earnings per share figure of 92.1p, and a full-year divi of 44.33p.

Charles Stanley is forecasting earnings before interest, tax and amortisation of £3.19bn.

"Asia, Africa and Latin America are expected to have been the drivers of growth, with more subdued performances in North America and Europe (Chicago Options: ^REURUSD - news) . We forecast group sales to be up by 6.5% on an organic basis, driven by a mixture of volume growth and improved mix," revealed Charles Stanley's Sam Hart.

Drinks giant Diageo will release full-year results on Thursday, and what a year it has had -- the shares are up around 50% on 12 months ago, having hit a new 52-week high just a couple of weeks ago, and have more than doubled since early 2009.

Diageo, along with other drinks manufacturers and tobacco companies, is the kind of firm that does well in today's emerging global economy. As more and more wealth reaches the pockets of the billions in China, India and other emerging countries, there is more cash for them to spend on daily luxuries -- and the twin evils of drinking and smoking tend to figure highly.

Diageo's shares are not cheap by usual measures -- they're on a P/E of over 18 based on today's price of 1,687p and on expectations for Thursday's figures. But how far can sales and profits grow? It could be a long way.

Diageo poised to reveal progress in hitting profit targets By MARTIN FLANAGAN
Published on Sunday 19 August 2012 00:00


STRONG emerging markets and greater resilience than ­expected in its core American territory will see spirits giant Diageo this week set a strong pace in meeting ambitious three-year trading targets unveiled a year ago.


Paul Walsh, chief executive of Diageo, Scotland’s largest whisky producer, told the City last August that the group was launching a project to achieve 6 per cent average annual organic net sales growth over three years.

In addition, the group said it was targeting a 200 basis point improvement in profit margins. Analysts expect Diageo to announce significant progress in hitting those targets at its annual results on Thursday,

Gideon Adler, drinks analyst at Investec Securities, said: “In the first nine months of this year Diageo has been running at 7 per cent topline [sales] growth, so therefore look well set to deliver against their targets.

“They have seen strong growth in emerging markets and look well on their way to achieving their other target of 50 per cent of sales from those markets by 2015.”

Under Walsh, the world’s biggest spirits company has been ploughing extra investment into satisfying a growing, aspirational middle class in the likes of Asia and Africa. Premium Scotch whisky brands such as Johnnie Walker have led the way. Adler added: “Meanwhile, Diageo’s US market [accounting for over 40 per cent of its operating profits] has been better than expected. Diageo’s spirits customers in the US are not immune from the economic travails there, but they are still more resilient than the mainstream beer drinker.

“At the high end of the market, consumers continue to trade up into premium Diageo brands like Johnnie Walker Blue Label and Ciroc vodka.”

Deutsche Bank said in a note: “We expect Diageo to be well on track to hit its new mid-term targets and to have delivered another perfect P&L – mid single digit top-line growth, high single digit Ebit [earnings before interest and tax] and double digit earnings per share growth.”

City optimism on the group’s latest performance has also been fuelled by a positive trading update in May and strong recent results from drinks ­rivals such as Beam, Brown Forman and Campari.

The City consensus for annual underlying operating profits at Diageo is £3.2 billion against £2.8bn in the previous year. Consensus for annual organic net sales growth is 6 per cent, against 5 per cent in 2011 when Walsh ratcheted up the key target.

Johnnie Walker whiskey maker Diageo (Other OTC: DGEAF.PK - news) was making gains on reports that it was closing in on a $3bn (£1.9bn) deal to acquire Jose Cuervo tequila. The firm already distributes the tequila brand globally.

Preliminary Results

Results summary

· Growth of: 6% net sales; 4 percentage points of positive price/mix; 9% operating profit and 60 basis points of margin expansion

· Emerging markets which amount to almost 40% of Diageo's business, grew net sales 15% and operating profit 23%

· Acquisitions in faster growing markets, primarily Mey İçki in Turkey, added £320 million of net sales and £82 million of operating profit after transaction and integration costs

· Marketing investment up 8%, up 30 basis points to 15.8% of net sales, focused on strategic brands and the fastest growing markets

· Free cash flow of £1.6 billion

· During the year Diageo increased its ownership stake in Shuijingfang and Halico and announced an agreement to acquire the Ypióca brand in Brazil and the intention to invest a further £1 billion in scotch capacity

· eps pre-exceptional items up 13% to 94.2 pence per share

· Recommended 8% increase in final dividend

Seems very slow to wake up to very good news

..Diageo lifts dividend on Asian, African prospects

Reuters - UK Focus –
.Symbol Price Change
DGE.L 1,698.00 +17.50

......
* Final dividend up 8 pct to 43.5 pence

* Confident of meeting medium-term targets

* FY eps up 13 pct to 94.2 pence vs 92.6 pence forecast

* Talks with Beckmann family on Jose Cuervo brand continue

* Shares up 1 pct

By Sarah Young

LONDON, Aug 23 (Reuters) - The world's biggest spirits group, Diageo Plc, increased its payout to shareholders, confident that buoyant demand for whisky and spirits in Asia and Africa would help it hit medium-term targets.

The Johnnie Walker whisky and Smirnoff vodka maker on Thursday said it was raising its full-year dividend by 8 percent to 43.5 pence ($69) per share, after an increase in sales and profit driven by emerging markets.

Exposure to fast-growing markets in Africa, Asia and Latin America meant Diageo (Other OTC: DGEAF.PK - news) outshone Dutch brewer Heineken NV , which posted a decline in first-half profit on Wednesday, hurt by weak European sales.

"Diageo has delivered on its promises today. The 8 percent increase in dividend reads encouragingly," Investec (Frankfurt: A0J32R - news) analyst Martin Deboo said.

The UK-based company has a dividend yield, a measure of the return investors get on the stock, of 2.9 percent for the 2011/12 financial year, according to Thomson Reuters Starmine.

That's more than the 2.1 percent ratio of arch rival and world No. 2 spirits group Pernod Ricard (Dusseldorf: 508063.DU - news) , which is due to report its annual results on Aug. 30.

As part of its growth strategy, Diageo is believed to be eyeing the acquisition of a minority stake in Mexican tequila maker Jose Cuervo from its owners, the Beckmann family.

"We are continuing discussions with the Beckmann family given the end period for our distribution arrangement," Chief Financial Officer Deirdre Mahlan told reporters on Thursday, refusing to be drawn on the nature of those talks.

The company's long-term distribution deal with Jose Cuervo ends in June 2013. Analysts estimate the world's best-selling tequila brand could be worth around $3.4 billion.

Diageo, which in 2011 set medium-term financial targets for 6 percent annual sales growth, posted an 8 percent rise in reported net sales in the year to the end of June, with an outperformance by emerging markets where sales jumped 15 percent.

Earnings rose 13 percent to 94.2 pence a share, beating a company-compiled consensus forecast of 92.6 pence.


WHISKY THIRST

Diageo, which also sells Captain Morgan rum and Guinness beer, expects half its turnover to come from Asian, African and Latin American markets by 2015 compared with nearly 40 percent in this financial year.

The largest producer of Scotch whisky, Diageo plans to invest over 1 billion pounds ($1.5 billion) in the drink over the next five years to meet growing demand from emerging markets.

A growing taste for spirits in Africa plus demand for Scotch in Latin America and Asia, particularly deluxe brands in South East Asia (KOSDAQ: 900110.KQ - news) and China, boosted Diageo's sales this year, while the company said performance in its established North American and Western European markets improved.

"We're achieving what we set out to achieve in Europe (Chicago Options: ^REURUSD - news) . I wouldn't declare victory, I think it's still going to remain to be a challenging environment," Mahlan said.

"We're really pleased with the U.S. business. We've had a really strong performance from our premium and super-premium brands."

In North America, which accounts for around a third of Diageo's sales, the first two months of the new fiscal year also started well, she added.

European sales were dragged down by declines in Southern Europe, where governments are cutting spending and battling record-high unemployment.

Markets in Spain, Portugal, Italy and Greece now account for just 5 percent of net global sales, after declining in recent years, Diageo said.

Shares in Diageo were up 1 percent to 1,698 pence at 1037 GMT.

..

Shares in top-brand brewer Diageo have frequently been trading at all-time highs. 1,000p in 2006. 1,140p in 2010. 1,400p in 2011. At the end of July this year, the shares breached 1,700p.

This morning, Diageo announced full-year results for 2012. These results again demonstrated the progress of the business that has supported the share price rises.

For 1998, Diageo paid shareholders 10.8p in dividends. This payout has since been increased every year, hitting 43.5p for 2012. In the last seven years, eps has increased from 62.0p to 94.2p. Diageo even managed to grow earnings and dividends through the financial crisis. Further eps growth is expected. The market is looking for an 11.8% rise for 2013.

Diageo reported strong growth in emerging markets. Of some concern, however, will be the 1% decline in sales volumes to European markets.

Some investors might think Diageo is priced for a fall. My belief is that the company's success has earned the shares a 'quality of earnings' premium. Unless Diageo's business suffers a significant decline, I would expect the shares to continue to look 'expensive'.

Diageo (Other OTC: DGEAF.PK - news) has advanced 22% to 1,715p so far during 2012, making the share one of this year's best performers in the FTSE 100 (Euronext: VFTSE.NX - news) (UKX).

The drinks group, which boasts brands such as Guinness, Johnnie Walker and Captain Morgan, has defied the wider economic gloom with a series of positive statements.

During February, Diageo reported half-year results that showed net sales up 7% to £5,757 million and underlying operating profits up 9% to £1,866 million. Progress in emerging markets was a particular highlight, with profits in such regions up 23%. The interim dividend was raised 7% to 16.6p per share.

During May, Diageo issued a trading statement that confirmed total sales had improved 11% during the group's third quarter.

Then in August, Diageo revealed full-year sales had advanced 8% to £10,762 million and operating profits had improved 9% to £3,198 million. The greatest progress occurred in Africa, where sales gained 11%, and Latin America and the Caribbean, where sales increased 19%. The annual dividend was lifted 8% to 43.5p per share, too.

Paul Walsh, Diageo's chief executive, said at the time:

"Diageo is a strong business, getting stronger and the results we released show that very clearly. 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. 6% organic top line growth, 9% operating profit growth and 60 basis points of margin expansion is a strong performance and demonstrates our commitment to delivering efficient growth."

Diageo's first-quarter update will coincide with the group's AGM on October 17, and may provide further positive news

It's time to go shopping for shares again, but where to start? Bombed-out bank RBS (LSE: RBS.L - news) ? Merger maniacs BAE Systems ? Or maybe out-of-favour fashion giant Burberry ?

There are plenty of great stocks to choose from, and I'm enjoying doing some window shopping. So here's the question I'm asking right now. Should I buy Diageo (Other OTC: DGEAF.PK - news) ?

Drink up!

I first bought Diageo in May 2010, but it took me time to acquire a taste for this international spirits and brewing company. Despite serving up a small measure of growth with a modest 3% dividend chaser, I still couldn't get excited about it. Still, I held on, thinking the odd drink can't do you any harm -- and I'm delighted I did. While other FTSE 100 (UKX) stocks have had their weak moments, this well-run company has gone from strength to strength. It is up 50% over the last 12 months, while the FTSE 100 (Euronext: VFTSE.NX - news) has grown less than 20%. I'll drink to that kind of success; the question now is, do I want a top up?

Alcoprofits

Diageo packs quite a punch. It is truly a global company, operating in 180 countries, with a whole barrel of famous brands, including Johnnie Walker, Smirnoff, Baileys, Tanqueray, Captain Morgan and Guinness. That's quite a drinks list.

2012 has gone very smoothly. Diageo posted pre-tax profits £3.12 billion in the 12 months to 30 June, a rise of 32%, with revenue up 10% to £14.6 billion.

That's good news for chief executive Paul Walsh. His performance-linked pay shot up to £11.2 million this year, from a mere £4.4 million last year, but unlike some executives, he is being rewarded for success rather than failure. Diageo is also the first major company to comply with the Coalition's demands for disclosing executive pay.

Thirsty work

European sales may have soured but this has been more than offset by thirsty emerging markets in Asia, Africa and Latin America, which now make up 40% of Diageo's business. Net (Frankfurt: A0Z22E - news) emerging market sales rose 15% and operating profits increased by more than 20%. By 2015, the company expects emerging markets to make up more than 50% of its business.

As I reported yesterday, the Chinese may be thinking twice about splashing out on luxury brands such as Burberry, but in good times or bad, most people will still pay for one of life's little luxuries: alcohol.

This cash-rich company is also investing in its future. It is investing more than £1 billion in the Scotch whisky renaissance, while Johnnie Walker is going down a treat in the US, where Diageo is nicely placed to benefit from a QE3-fuelled recovery. Europe (Chicago Options: ^REURUSD - news) , where it still generates roughly one-third of its profits, is more of a worry.

A pricey round

It isn't all fun, fun, fun. The rising cost of raw materials, such as wheat and barley, could prove a downer, as could further gloom in Europe. The company also has significant foreign exchange exposure, a worry in this turbulent time for currencies.

My biggest concern is that Diageo is getting expensive. It now trades on a price-to-earnings ratio of 17.4 times earnings. Despite its progressive dividend policy, which included an 8% hike this year, the surging share price means that you are buying a modest yield of 2.6% (covered 2.2 times).

I'm delighted I ordered a slug of Diageo in 2010. But at these prices, I'm in no hurry to order another round.

Strong buying, with a good rise

Diageo in advanced talks to acquire stake in Indian concern
Fri 21 Sep 2012

DGE - Diageo

Latest Prices
Name Price %
Diageo 1,717.00p -0.17%


LONDON (SHARECAST) - The world´s largest alcoholics drinks maker, Diageo (Market Cap: 43bn pounds), is in advanced talks to buy a stake in Indian outfit United Spirits (Market Cap: 1.48bn pounds), four people with knowledge of the matter have told Bloomberg.

Such a transaction would fit in well with Diageo´s strategy of increasing its portfolio of emerging market assets; in fact, the company already has operations in the South Asian country.

Diageo tried to acquire a stake in United Spirits back in 2009 but failed after it was told that its offer was not at fair value.

So, what may have changed this time around? According to the news agency one of United Spirits´ main shareholders, Vijay Mallya, needs to plug a large financing gap –of approximately 370m pounds- in another one of his holdings, airline Kingfisher.

Significantly, as part of the deal, which is yet to be finalized, Diageo may get the right to appoint a majority of United Spirits’s board members, including the chairman, one person said.

The two companies may announce a deal by next month, said one of the people.

United Spirits shares have doubled this year, and yet profit in the three months ended June 30 rose by just 5.3% while sales did so by 6.3%. Over at Diageo meanwhile sales grew 24% in the country in the year through June 30, the company said, driven by “strong momentum across the scotch portfolio.”

A spokesman for United Spirits has denied the speculation.

As of 15:09 shares of Diageo are falling by 0.7% to the 1708p mark.

Would Warren Buffett Buy Diageo?


http://uk.finance.yahoo.com/news/warren-buffett-buy-diageo-142208512.html

25 September 2012



Joint statement from Diageo plc and United Spirits Limited



Today Diageo plc and United Spirits Limited have issued the following joint statement:



United Spirits Limited and Diageo plc confirm that Diageo plc is in discussion with United Spirits Limited and United Breweries (Holdings) Limited in respect of possible transactions for Diageo plc to acquire an interest in United Spirits Limited. However there is no certainty that these discussions will lead to a transaction.

Good buying on the news today

British booze giant, Diageo (Other OTC: DGEAF.PK - news) , also rose after it confirmed it is in talks to invest in Indian outfit United Spirits. Helping thing along perhaps, analysts at Nomura today reiterated their buy recommendation on the company´s shares (and 2000p target) saying that: "Last year's investor event in Shanghai set out a strategy of investing for growth in Asia, which looks to be on track. We believe that continuing high double-digit EBIT growth in this region will help the group to increase organic EBIT overall at least as fast as last year (we estimate 9% in FY 13). In addition, we continue to see scope for value creation through M&A in spirits."

Spirits giant Diageo confirmed this week that it is in talks with India’s United Spirits regarding the UK-listed company potentially buying a stake in the group. A deal probably wouldn’t be cheap – but it makes complete strategic sense for Diageo. Most Indians drink locally brewed products, because import tariffs on alcohol are spectacularly high, being in excess of 150%. However, hopes are mounting that an EU-India free trade agreement can be signed soon – although talks on this matter have dragged on for four years amid disagreements on certain tariffs and visa issues. It is in the interests of both parties to get a trade deal signed as soon as possible.

The purchase would give Diageo a strong foothold into the Indian market, which has a complex, regulated distribution structure with inter-state taxes and acts as a strong barrier to entry. Diageo is significantly more profitable than United Spirits. Credit Suisse has calculated that United Spirits sells close to 120m cases of alcohol each year compared with Diageo’s 157m, but earnings before interest, tax and amortisation (EBITA) equal to just 4% of Diageo’s. This implies Diageo would have plenty of scope to help boost profitability at the Indian group. The shares are trading on a June 2013 earnings multiple of 16.7 falling to 15 and yielding 2.8%. Questor last recommended a buy on June 7 when Diageo shares were at £15.81. They are up 10% from then and remain a buy, The Telegraph reports.

These going to £20 before christmas will be a nice present.

At times like these, who doesn't need a drink? Spirits maker and brewer Diageo knows the answer to that question, because its stocks have gone down a treat in the recession. It operates in more than 180 countries worldwide, and that means an awful lot of thirsty customers. When I recently tried to get the measure of Diageo, I discovered its share price had already risen 50% over 12 months (great news for me, I hold it). It has since fizzed another 5%. Plenty of people want a taste of its recent success, but I'm saying no to a top-up. On a forecast P/E of 17.1 for June 2013, there must be better value prospects out there. I won't buy, but I am most definitely holding.