Spirits firm Diageo said today its full-year profits would suffer from adverse exchange rates to offset a 6 per cent rise in sales.
The British firm, which makes Smirnoff vodka, Johnnie Walker whisky scotch and Guinness, said full-year sales and volumes up through the end of June will be similar to the increases seen in its first-half of 6 per cent and 3 per cent respectively.
The group has gained from better trading in the United States, which accounts for some 40 per cent of profits - but is suffering from the translation of dollars into pounds.
It added in a trading statement that exchange rates will trim annual pretax profits before exceptionals by £95 million sterling to £100 million, and for its new 2004-2005 year the hit will be a broadly similar £100 million.
Diageo said its underlying operating profits are expected to grow 6 per cent in the year to end-June, and that sales, volumes and profit increases are expected to be similar for its new financial year 2004-2005 just starting.