Diageo, the owner of Gordon’s gin, reported an operating profit of £4 billion in its preliminary results on Thursday.
The British multinational alcoholic drinks company said that, for the year ended 30 June 2019, operating profit rose 9.5% to £4 billion.
Diageo said that a strong growth in gin continued with Tanqueray and Gordon’s growing to double digit in Europe and Turkey, and Western Europe continued to gain market share in gin.
Diageo also added that ready to drink jumped 17% in Europe and Turkey as it was driven by the Gordon’s premix range.
Equally, the company said that scotch represented 25% of its net sales. Growth was driven by Johnnie Walker, which delivered a strong performance with net sales up 7%. This category benefitted from the successful launch of “White Walker by Johnnie Walker,” inspired by the popular TV series Game of Thrones.
“Diageo has delivered another year of strong performance. Organic volume and net sales growth was broad based across regions and categories, with new product innovation being a strong contributor. We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth,” Ivan Menezes, Chief Executive, said in a company statement.
“Fiscal 19 has been another year of strong free cash flow delivery at £2.6 billion and we have returned £2.8 billion to shareholders via share buybacks. The Board has approved plans for an additional return to shareholders of up to £4.5 billion over Fiscal 20 to Fiscal 22,” the Chief Executive continued.
“Our focus on quality sustainable growth is backed by a culture of everyday efficiency that enables us to invest smartly in marketing and growth initiatives while expanding margins.”
“These results reflect the steady progress we are making and as we look ahead we see attractive opportunities to deliver consistent growth and create shareholder value. In the medium term I expect Diageo to maintain organic net sales growth in the mid-single digit range and to grow organic operating profit ahead of net sales in the range of 5%- 7%.”
Earlier this week Fever-Tree, the producer of carbonated mixers often paired with gin, said that the UK saw a moderation in growth rates for the first half of 2019.
Shares in Diageo plc (LON:DGE) were trading at -1.89% as of 10:51 BST Thursday.
