Diageo profit up as Guinness sales fall

Diageo reported a 13 per cent underlying rise in annual earnings today as sales of Guinness fall by 6 per cent across Europe.

Diageo reported a 13 per cent underlying rise in annual earnings today as sales of Guinness fall by 6 per cent across Europe.

The world's biggest alcoholic drinks group reported an operating profit for the full year of €2.15 billion, up 8.7 per cent on the previous year and ahead of forecasts.

But sales of Guinness have fallen by 6 per cent across Europe, including a 9 per cent fall in Ireland. However growth in international markets, led by Africa, helped stem the decline to three per cent globally.

The group said it aimed to increase underlying operating profit 9 per cent in the current year after beating its 8 per cent target in the year to June 2007 with a 9 per cent increase.

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The drinks giant benefited from strong growth in the United States, which accounts for 40 per cent of group profits, and emerging markets such as Russia, China and Latin America. It is spending heavily to revive depressed European sales.

The company added that underlying sales grew 7 per cent, compared with forecasts for an above-6 per cent rise.