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Diageo remains on track for growth, following ‘good start’ to financial year

10 October 2022 By Arabella Mileham

Diageo said it had made a “good start” to the current 2023 financial year and remained on track for growth, in a trading statement ahead of this morning’s AGM.

Diageo’s CEO, Ivan Menezes (Photo: Diageo)

Chief executive Ivan Menezes said organic net sales grew across all regions, reflecting its “advantaged portfolio… continued investment in brand building and… agile supply chain and culture.”

We remain well-positioned to deliver our medium-term guidance for fiscal 23 to fiscal 25 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth sustainably in the range of 6% to 9%.”

He noted that Diageo expected the operating environment to “remain challenging with ongoing volatility due to geopolitical uncertainty, a weakening of consumer spending power, inflationary pressures and disruption related to Covid-19,” but said he was “confident in the resilience of our business and our ability to navigate these headwinds while executing our strategic priorities, including our ambitious 2030 sustainability plan.”

The group held it’s annual AGM this morning.

Hopefully this will help boost its share price, which has slid by a little more than 6% since last Christmas, despite returning recent bumper double-digit organic growth numbers of up to 20% and sticking to forecasts of further progress in the 6% to 9% range in the current year.

Although drinks companies among the best performers during the wake of the pandemic, as lockdowns eased, displaying resilience in late 2020 and soaring in 2021, last week the drinks business reported that shares in drinks companies are falling out of favour. It seems that investors seem increasingly jittery about a consumer reaction to increased cost prices to cope with raging inflation on raw materials, fuel and transport. The FTSE 100 index of big companies has lost 7% since the turn of the year, showing itself to be more stable than Wall Street, which fell by more than 18% and Paris by 20%.