Diageo delays 2020 results due to home working

The world’s largest spirits group has delayed releasing its full-year fiscal results to give auditors working from home more time to assess the impact of the coronavirus pandemic.

Diageo, which makes Guinness and Johnnie Walker Whisky, will publish its earnings for the year to 30 June 2020 five days later than planned, giving auditor PwC more time to look over the balance sheet to compensate for “the practical challenges of remote working”, according to the spirits group.

The company will hold a conference call for investors and analysts on the morning of 4 August 2020 when the results are released.

Diageo is not the only drinks company to have its timetable disrupted by the pandemic. Mixer maker Fever-Tree was due to release its preliminary 2019 fiscal results on 24 March, but cancelled their publication following pressure from the Financial Conduct Authority.

The FCA issued guidance on 21 March asking that listed businesses delay their preliminary results announcements for 2019 by a minimum of two weeks due to the challenges caused by the UK’s coronavirus prevention strategies.

The financial body said public companies and the audit firms they work with to compile the documents are facing “unprecedented practical challenges during the coronavirus crisis.”

Diageo in 2020

The lockdowns have forced bars and restaurants around the world to close for months at a time, which has in turn cut off one of Diageo’s key routes to market. The on-trade accounts for around 20% of Diageo’s sales in the US, where some bars have started to serve customers again depending on the state’s laws. In Europe, as much as half of all of Diageo’s sales go through hospitality venues.

While bars and restaurants have been allowed to offer takeaway service during lockdown, we already know this hasn’t been enough to offset the lack of footfall. Italian drinks group Campari’s sales fell 5.3% at the start of the financial year, while Jameson whiskey maker Pernod Ricard’s global sales fell 14.5% in its third financial quarter as the widespread closure of bars and restaurants took effect.

Diageo warned its could take a £200 million hit this year back in February and, two months later, CEO Ivan Menezes withdrew the company’s fiscal guidance for 2020 altogether, as executives struggled to calculate just how damaging the coronavirus outbreak and subsequent lockdowns will be.

Trade body UK Hospitality has said that pubs and restaurants across the UK will only be trading at just over half of last year’s levels by the end of 2020.