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Diageo first-half sales up 6% boosted by strong UK performance

Published:  31 January, 2019

Diageo has reported a 5.8% increase in net sales to £6.9 billion boosted by a strong GB performance.

The Gordon’s and Tanqueray owner said operating profits rose 11% to £2.4 billion, in line with analysts’ expectations, for the six months to 31 December 2018, while the group’s sales on an organic basis were up 7.5%, beating analysts’ expectations. 

The overall performance was boosted by “a very strong half” in the GB, where net sales rose 14% driven by a strong performance from all its key brands, including Tanqueray, Gordon’s, Smirnoff and Guinness, said Diageo GB.

“The gin category continues to boom in GB. Tanqueray and Gordon’s remain firm favourites amongst consumers, with both brands delivering strong double-digit growth over the last six months,” said Dayalan Nayager, managing director, Diageo GB, Ireland and France.

Smirnoff returned to growth with net sales increasing 4%, while Johnnie Walker grew 6% partially driven by the launch of the limited-edition ‘White Walker by Johnnie Walker’, he added.

“The launch proved hugely popular, selling one bottle a minute on Amazon UK in the first 24 hours of it being available.”

In beer, the company was outperforming the category, he added, with Guinness delivering net sales growth of 6% driven by a strong performance from Hop House 13 lager.

“We’ve seen a host of exciting activations by our brands over the half. The Guinness Open Gate Brewery opened its doors in London, giving consumers a chance to sample some of Guinness’s unique and innovative beers.

“We showcased seven of our Reserve brands at London Cocktail Week in October, which saw around 25,000 people attend, and the Baileys Treat Bar Christmas Pop-up returned to London for a second year in a row.”

As part of a strategy to focus on its fast growing gin and tequila brands, Diageo overhauled its portfolio last year, selling 19 of its lower-end brands including a group of Seagrams whiskies and Romana sambuca.