Diageo PLC (LSE:DGE) announced strong sales growth for the first half as consumers stocked up on premium brand drinks for home consumption and the hospitality sector increased its orders as as pubs and bars reopened after the easing of pandemic restrictions.
The world's biggest spirits maker said net sales grew by 15.8% in the first six months to £8bn, with organic net sales up 20%.
The maker of Johnny Walker whisky and Guiness stout expects the organic net sales momentum to continue through the second half of the year, although it cautioned that comparatives are tough.
Operating profits amounted to £2.7bn, a rise of 22.5% on the same period in the prior year, while the operating margin increased by 190 basis points.
The company said it saw a strong performance in scotch, tequila and beer during the first half, while premium plus brands contributed 56% of net sales..
Diageo raised the interim dividend by 5% to 29.36p and said it will accelerate its £4.5bn share buyback programme to complete the return of capital to shareholders in 2023 instead of 2024.
Diagoe chief executive Ivan Menezes said the company expects COVID-19, global supply chain constraints and rising cost inflation to continue to impact the business, but that he is confident Diagoe will "successfully navigate these disruptions through the remainder of the year".
He said the group continues to forecast organic net sales growth of 5%-7% and organic operating profit growth 6%-9% over the medium term from FY23 to FY25.