Diageo has reported a 28% increase in operating profits to £2.1bn, aided by the weakness of the pound and strong whisky sales.
In the first half of Diageo’s financial year to the end of December, a struggling pound helped drive up sales by 14.5% to £6.4bn, while profit increased by 28% to £2.1bn.
Scotch whisky represented 27% of Diageo’s net sales and was up 6% in the half with growth in North America, Europe, Africa and Latin America and Caribbean driven by Johnnie Walker and Buchanan’s.
Tequila also performed well, with sales up 36% in organic volume sales and 18% in organic net sales and beer sales rose one per cent in organic volume sales.
Vodka and rum saw organic volume declines in the period, with vodka also dipping in organic net sales but all eight spirit categories delivered double-digit sales growth.
Diageo shares rose by 4.6% to £22.40 making it the best performer in the FTSE 100.
Ivan Menezes, Diageo chief executive, said, “We have delivered a strong set of results with broad-based improvement in both organic volume and top line growth and this positive momentum demonstrates continued effective execution of our strategy.
“Highlights this half include improved performance in our US Spirits business and across our scotch portfolio, driven by our focus on marketing with impact, innovating at scale, expanding our route to consumer, and winning in reserve. Progress on productivity supports growth, margin improvement and consistent strong cash flow generation as well as improving our agility.
“Our expectations of delivering stronger financial performance this year are unchanged. We are confident of achieving our medium term objective of consistent mid-single digit top line growth and 100bps of organic operating margin improvement in the three years ending 30 June 2019.”