Diageo reports 'encouraging return to growth'

Global drinks firm Diageo has reported an “encouraging return to growth" in its half-year results, with strong growth in spirits.

For the six months to 31 December 2020, the group said net sales were down 4.5% to £6.9b, while reported operating profit declined 8.3% to £2.2b.

Across Diageo's Great Britain business, net sales increased 2% with strong momentum in the off-trade, which offset declines due to on-trade restrictions and closures.

The company's spirits business saw 15% growth, while on-trade beer sales declined during lockdowns despite share gains in the sector sector when restrictions were eased.

Net sales in Ireland declined 37% with beer net sales down 44%, with coronavirus restrictions on the on-trade and hospitality business closures particularly impacting Guinness keg sales.

Dayalan Nayager, managing director of Diageo Great Britain, said: “We have responded to a challenging operating environment with agility, using insights and data to pivot to changes in consumer occasions and behaviours. As a result, we have delivered net sales growth of 2% in the half. Strong momentum in the off-trade more than offset declines in on-trade that resulted from trade restrictions and closures.

“As the British drinks trade continues to face one of its most challenging times ever, Diageo’s £30m “Raising the Bar” recovery fund in Great Britain has helped many thousands of outlets to date, delivering nearly 30,000 sanitiser stations, over 500,000 litres of hand sanitiser, as well as mobile bars, PPE equipment, outdoor ‘snugs’ and takeaway alcohol equipment, such as pint carriers.”