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Diageo PLC on Tuesday announced a challenging year, citing geopolitical volatility, as it expected pressures to persist in the new financial year. The London-based brewer and distiller behind Guinness stout, Baileys liqueur, Tanqueray gin and Captain Morgan rum said sales in the financial year that ended June 30 slipped 1.3% from $27.89 billion from $28.27 billion, as drinks volumes contracted 5.3% to 230.5 million equivalent units from 243.4 million. Pretax profit declined 3.3% to $5.46 billion from $5.64 billion. Diageo shares fell 9.9% to 2,296.00 pence each on Tuesday morning in London. The wider FTSE 100 index was down just 0.7%. Diageo upped its payout by 5.0% to 103.48 cents per share from 98.55 cents. ‘While [financial 2024] was a challenging year for both our industry and Diageo with continued macroeconomic and geopolitical volatility, we focused on taking the actions needed to ensure Diageo is well-positioned for growth as the consumer environment improves,’ Chief Executive Officer Debra Crew said. ‘[Financial 2024] was impacted by materially weaker performance in [Latin America & Caribbean]. Excluding LAC, organic net sales grew 1.8%, driven by resilient growth in our Africa, Asia Pacific and Europe regions. This offset the decline in North America, which was attributable to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year.’ In the new financial year, Diageo said the ‘consumer environment continues to be challenging’. ‘We expect the negative pressure on organic operating margin that we saw in the second half of [financial 2024] to persist into [financial 2025]. We will continue to drive productivity and pricing to offset cost inflation and continue to invest in strategic initiatives to drive long-term sustainable organic operating profit growth,’ it added. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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