Diageo annual profit rises on stronger off-trade performance

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Alcoholic drinks maker Diageo reported a rise in annual profit as sales growth was boosted by growth in its off-trade business that offset pandemic-led weakness in offset on-trade. For the year ended 30 June 2021, pre-tax profit rose to £3.7 from £2.0 billion as sales increased 8.3% to £12.7 billion.

The growth in sales reflected 'resilient consumer demand, spirits category continuing to take share of total beverage alcohol and lapping a softer fiscal 20,' the company said.

'Shipments were ahead of depletions by approximately 5 percentage points, due to the replenishment of stock levels by distributors, following a reduction by distributors of inventories in fiscal 20.'

The company increased its recommended final dividend by 5% to 44.59 pence per share.

'We expect organic net sales momentum to continue into fiscal 22,' the company said.

'We believe we are well positioned to continue to benefit from resilience in the off-trade and recovery in the on-trade. However, we expect near-term volatility to remain, including the potential impact of any future waves of Covid-19, and for disruption in Travel Retail to continue,' it added.