Diageo holds on to profit target despite downturn

Diageo is holding onto its full year profit target of between 7% and 9%, despite the financial crisis. TextDiageo is holding onto its full year profit target of between 7% and 9%, despite the financial crisis.

The drinks giant, which produces Smirnoff vodka, Johnnie Walker whisky and Guinness said organic net sales growth in the three months ended 30 September 2008 was 6%.

Chief executive Paul Walsh said that Diageo had delivered a "good trading performance" in its first quarter, which ran from July to September, despite anticipated global GDP growth slowing.

Walsh said the company has not seen significant adverse changes in its markets over the past three months, but said that it will be "alert to the impact the recent dislocation in the financial markets is likely to have on trade customer and consumer behaviour during the rest of the financial year."

In August, Diageo reported a lower than expected 7% rise in sales for the year ending June 2008 and a small drop in pre-tax profit to £2.095 billion, but said that operating profit had improved 9% to £2.23bn.

The group lowered its forecast for 2009 from 9% to a more cautious 7% to 9%.