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Diageo profits dip 5%
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September 16, 1999: 6:55 a.m. ET
Food, spirits company slips after asset sales; 2nd-half sales improved
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LONDON (CNNfn) - Diageo, the British-based food and spirits company, posted a 4.9 percent drop in full fiscal year net profit Thursday, but said sales growth returned in the second half of its fiscal year.
The result was at the top end of analysts' forecasts. Diageo (DGE) shares added 2.2 percent in early Thursday trading.
Diageo, the world's largest alcoholic beverage producer and owner of Burger King and the Pillsbury bakery business, said pretax profits slipped to 1.77 billion pounds ($2.83 billion) in the year ended June 30.
The decline was due mainly to divestitures forced on the firm by regulators following its creation in 1997 from the merger of Guinness and GranMet.
The strength of the pound clipped 45 million pounds from the pre-tax result. Excluding the effect of the asset sales, operating profits rose 8 percent to 1.90 billion pounds.
The divestitures lowered full-year sales by 1.45 percent to 11.80 billion pounds, though the firm said margins in all of its business units improved.
Diageo Chairman Tony Greener said the second half had provided a stronger performance than the first, with a 6 percent rise in operating profit during the period. He added that Asia had "turned a corner," with a 19 percent rise in underlying profits in the second half.
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Diageo
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