Diageo sees 22% sales boost thanks to gin trend

Gin has been the most popular category for drinks company Diageo, with its Gordons and Tanqueray brands seeing a sales boost of 22% across Europe.

Vodka sales at the firm were down by 2% in its latest financial results to the year ending June 2018, while its Guinness business saw its sales increase by 8%.

Overall, the company reported net sales of £12.2bn and an operating profit of £3.7bn, up 0.9% and 3.7% respectively.

The company said all regions contributed to broad based organic growth, with organic net sales up 5% and organic volume up 2.5%. Organic operating profit was up 7.6%, improving organic operating margins by 78 basis points. It said its higher marketing investment was offset by efficiencies from its productivity programme.

The cash flow for Diageo continued to be strong, broadly in line with last year, with £3.1bn net cash from operating activities and £2.5bn free cash flow.

Ivan Menezes, chief executive, said: “Diageo has delivered another year of strong, consistent performance. These results reflect the high performance culture we have created in Diageo, the ongoing rigorous execution of our strategy, our focus on the consumer and our ability to move swiftly on trends and insights.

“The changes we have made in the business and the shifts in culture we continue to drive, ensure we are well placed to capture opportunities and deliver sustained growth. Our financial performance expectations are unchanged and we expect to continue to invest in the business to deliver our mid-term guidance of consistent mid-single digit organic net sales growth and 175bps of organic operating margin expansion for the three years ending 30 June 2019.”