Company announces £660m of share buybacks following a rise in sales and profit.
Diageo shares fizz to an all-time high after buyback announcement
- Organic growth helps operating profit grow by 11% to over £2bn.
- UK’s growing taste for gin helps sales rise by 14%.
- We continue to recommend the shares as ‘buy’.
Shares in the company fizzed to an all-time high this morning as the markets reacted to the group’s latest interim results, which came in towards the top end of analyst forecasts and were impressed with a further £660 million of share buybacks. Net sales rose by 5.8% to £6.91 billion and operating profit was up by 11% to £2.43 billion helped by organic growth.
Tapping into the UK’s ever-growing taste for gin, sales rose by 14% in the UK and with Johnnie Walker & Tanqueray gin two of its famous brands, helping make the company the largest producer of the spirit in the world. The group have been increasing focus on its faster growing brands, which has led to the sale of some of its smaller brands.
The CEO highlighted growth was broad-based, and they expect to deliver mid-single digit organic sales growth for the financial year. He also went onto highlight how these results are further evidence of the changes they have made to put the consumer at the heart of our business.
We continue to recommend the shares as buy for investors seeking balance and willing to accept a lower level of risk.
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