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Food & drink

Diageo shares ease as it reports flat 2015 sales

Drinks behemoth Diageo saw shares sink a tad on Thursday....

Drinks behemoth Diageo (LON:DGE) saw shares sink a tad on Thursday as it reported flat sales in 2015 prompted by declines in some of its markets.

The firm, known for Johnnie Walker whiskey, Baileys and Captain Morgan rum, posted net sales of €10.8bn in the year to end June compared to €10.2bn in 2014, with operating profit of €2.7bn (2014:£2.7bn).

Ivan Menezes, the chief executive, was nevertheless upbeat on future prospects, saying he believed that stronger volume growth will deliver an improved top line performance in full year 2016.

"Our F15 performance reflects the challenges we have seen on top line growth.

"However, it does not diminish my confidence in what we can achieve in F16 and even more so beyond that," he said.

He added: "This year we made further changes to build strong, sustained performance including embedding our sell out discipline, improving cash conversion and strengthening our route to consumer."

He added: "As we achieve our productivity gains from F17 we expect to deliver mid single digit organic top line growth on a sustained basis and operating margin expansion of 100 basis points over 3 years. Our brands, our global footprint and our people give me confidence that Diageo can deliver strong and sustained performance."

Shares eased 0.3% to 1,834p.

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