Diageo Fiscal Year 2021 Profit, Revenue Rose Despite Unfavorable Foreign Exchange Effects -- Update
July 29 2021 - 3:38AM
Dow Jones News
By Matteo Castia
Diageo PLC on Thursday reported a rise in pretax profit for
fiscal 2021 on higher net sales but warned over possible headwinds
in fiscal 2022 related to unfavorable currency movements.
The world's largest liquor maker--which owns Johnnie Walker
whisky and Tanqueray gin--made a pretax profit of 3.71 billion
pounds ($5.16 billion) for the year ended June 30, compared with
GBP2.04 billion in fiscal 2020.
A consensus estimate taken from FactSet and based on eight
analysts' projections expected Diageo's fiscal 2021 pretax profit
to be GBP3.63 billion.
Net sales rose to GBP12.73 billion from GBP11.75 billion a year
earlier. The company said the progress was led by the North
American market, its largest business area, and that it benefited
from increased demand in the off-trade sector amid continued
coronavirus restrictions in the on-trade.
"North America organic growth [was] of 20.2%, reflecting
resilient consumer demand, spirits taking share of total beverage
alcohol and the replenishment of stock levels by distributors and
retailers," the company said.
However, the net sales progress was partly offset by unfavorable
foreign exchange, Diageo said.
A consensus estimate taken from FactSet and based on 19
analysts' projections expected Diageo's fiscal 2021 net sales to
come in at GBP12.57 billion.
The board declared a final dividend of 44.59 pence a share,
taking the full-year payout to 72.55 pence. Diageo said it has also
started the second phase of its share buyback program, aiming to
return up to GBP1 billion to shareholders by the end of fiscal
2022.
The FTSE 100 company said it expects continued net sales
momentum in fiscal 2022 and that it will benefit from weak
comparatives for off-trade consumption despite a likely slowdown in
that sector's growth rate.
Diageo said it also anticipates negative currency
effects--including a stronger pound sterling--to hurt net sales and
operating profit in fiscal 2022.
Shares at 0700 GMT were down 77.5 pence, or 2.2%, at 3433.5
pence.
Write to Matteo Castia at matteo.castia@dowjones.com
(END) Dow Jones Newswires
July 29, 2021 03:27 ET (07:27 GMT)
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