Diageo full-year profit up 2 pct

LONDON – Diageo PLC, the world's largest distiller, on Thursday reported a 2 percent increase in full-year profits led by strong growth in sales of spirits.

Diageo, whose brands include Johnnie Walker, Smirnoff and Guinness, reported net profit for the year ending June 30 of 1.94 billion pounds ($3.1 billion), up from 1.9 billion pounds a year earlier. Operating profit of >3.16 billion pounds was slightly ahead of analysts' consensus.

Sales rose 10 percent to 14.6 billion pounds. Sales of spirits rose 12 percent and the company says that accounted for 80 percent of its growth.

The company's board recommended an 8 percent increase in the full-year dividend to 43.5 pence per share.

Diageo shares were up 0.5 percent at 1,689.5 pence in early trading in London.

"Diageo has managed to ride the wave of emerging markets strength, whilst also being well positioned for any uptick in the North American economy," said Richard Hunter, head of equities are Hargreaves Lansdown Stockbrokers.

Latin American and the Caribbean produced the company's strongest growth with volume rising by 10 percent, and Africa volume rose 5 percent.

Although Asia-Pacific volume was up 2 percent, the company said China was up 8 percent and volume in India was 17 percent higher. Sales of Guinness in the region were 10 percent higher and Johnnie Walker was up 4 percent.

Volume in North America was up 2 percent, with gains in spirits and beer offsetting a 5 percent drop in wine volume, which Diageo blamed on intense price competition.

Sales volume in Europe was down 1 percent although there was a 14 percent increase in Russia and Eastern Europe and a 7 percent gain in Turkey, where Diageo acquired the spirits company Mey Icki.