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The Markets
by Proactive
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The Markets
by Proactive
Proactive UK has moved.
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Food & drink

Diageo keeps dividend but no guidance in sight

The board recommended a 42.47p per share payout to shareholders, flat on last year

Diageo PLC (LON:DGE) announced a final dividend for the year to June 30 but did not provide any guidance or updates on current trading.

The board recommended a 42.47p per share payout to shareholders, flat on last year, bringing the full-year dividend up 2% to 69.88p.

READ: Diageo serves up Johnnie Walker in new paper-based bottle

Net sales slid 8% to £11.7bn with growth in North America more than offset by declines in all other regions as the Johnnie Walker maker was hit by the coronavirus crisis.

The alcoholic drinks producer incurred in extra expenses, including £1.3bn impairment charges in India, Nigeria, Ethiopia and on the Windsor brand in Korea.

As a result, profit before tax halved to £2bn, while net borrowings at year-end were 15% higher at £13bn.

"Like the other major brewers Diageo has large fixed costs that can’t be flexed when sales fall, so small falls in revenue hit profits hard," said William Ryder, analyst at Hargreaves Lansdown.

"Diageo is still a great business, still owns some terrific brands and whisky is still a very difficult market for newcomers to break into. The hit to earnings should be short lived provided the global economy doesn’t take too long to recover."

Shares lost 5% to 2,734p on Tuesday morning.

--Adds analyst comment, shares--

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