Guinness manufacturer Diageo has said that it is expecting organic operating profit growth of at least 14% in the current fiscal year, while restarting its capital return plan following a strong recovery led by North America.
Second Part Of Capital Return Plan
The UK-listed company, which also makes Johnnie Walker whisky and Tanqueray gin, started the second part of a capital return plan of up to £1 billion and is expecting to buy back shares starting now, it said, after pausing it last year because of the COVID-19 pandemic.
The pandemic had hammered sales at spirits makers as restaurants, bars and other entertainment avenues were closed to contain the outbreak, but restrictions are being gradually lifted in major countries this year amid vaccination drives.
Strong Performance In North America
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Diageo CEO Ivan Menezes said that the company's performance in its largest market, North America, has remained particularly strong on the back of resilient consumer demand, its diverse portfolio and efficient marketing.
Surprise Return To Organic Sales Growth During Second Half Of 2020
The robust showing comes after Diageo surprised markets in January by returning to organic sales growth for the six months to December of 2020, thanks to a jump in demand for premium tequila and bourbon at US retail stores. Organic operating profit had shrunk 3.4% for the first half.
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