Guinness maker Diageo sees profits jump

Diageo chief executive Paul Walsh: "We have seen very attractive growth in Asia, Latin America and Africa"

Diageo, the world's biggest producer of spirits, has reported a big jump in annual profits, thanks in part to strong sales and acquisitions in emerging markets.

Pre-tax profit for the year to the end of June was £3.1bn, up 32% on the £2.4bn the company made in the previous year. Sales rose 10% to £14.6bn.

The maker of brands such as Guinness, Smirnoff, Baileys and Johnnie Walker did particularly well in Latin America.

The firm proposed an 8% dividend rise.

Net sales in emerging markets, which account for nearly 40% of Diageo's business, grew 15% over the year, while operating profits grew 23%.

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Latin America and the Caribbean, the group's best-performing region, saw net sales rise 19% and operating profits rise 23%.

In Paraguay, Uruguay and Brazil, nearly two-thirds of growth came from sales of whiskey, particularly Johnnie Walker and Old Parr, the company said.

Commenting on the results chief executive Paul Walsh said: "Diageo is a strong business, getting stronger and the results we released this morning show that very clearly.

"We have increased our presence in the faster growing markets of the world, through both acquisitions and strong organic growth."

Net sales for the group grew 6% while operating profits grew 9%.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: "Despite heightened expectations, investors are raising a glass to another set of sparkling results.

"Diageo has managed to ride the wave of emerging markets strength, whilst also being well positioned for any uptick in the North American economy."

Diageo's shares have risen 50% over the last year.

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