Diageo has reported a slight rise in first-half profit but a 29 per cent drop in earnings at its Burger King fast food chain.
The company, the biggest drinks group in the world and maker of Guinness, said today it remained committed to splitting off the Burger King business and said returning cash to shareholders was "high on its agenda" in the second half of its financial year.
In the six months to December 31st, a strong performance by top brands such as Smirnoff vodka helped Diageo to a pre-tax profit of £1.228 billion sterling, up from £1.189 billion a year earlier.
The profit increase, driven by Diageo's core drinks business, was in line with analysts' forecasts of £1.215-1.250 billion.
The group said an improvement in Burger King's second-half performance would help it move to hive off the Miami-based hamburger restaurant chain. Diageo has said it is looking to sell or float the business, where operating profit fell to £79 million in the first half.
"We have a number of options as to how separation can be achieved and we will explore all of them," Diageo said. It said the decline in Burger King operating profit was a result of steps taken to prepare the unit for separation, upgrading some restaurants and closing others. Sales at Burger King in North America rose 1 per cent.
Diageo will have almost no debt following the planned disposals of Burger King and its Malibu coconut rum brand, which it is selling to satisfy regulators after buying part of the Seagram drinks empire.
Diageo was born from the 1997 merger of Guinness with food and spirits company Grand Metropolitan.