Diageo Share Discussion Threads

[loftus16] 26/1/2018 11:23

Hadn't sold!

[mozy123] 25/1/2018 08:54

Solid - looks like a good buying op

[broadwood] 25/1/2018 08:23

- Diageo posted strong performance for six months ended 31 December 2017 with reported net sales of £6.5bn and operating profit of £2.2bn - up 1.7% and 6.1%, respectively.

The group said the rise in net sales and operating profit was supported by organic growth, which was partially offset, however, by adverse exchange.

Diageo said all regions contributed to broad based organic net sales growth, up 4.2%, and organic volume grew 1.8%.

Organic operating profit grew 6.7%, ahead of top line growth, as higher marketing investment was more than offset by efficiencies from our productivity programme.

Diageo said cash flow continued to be strong and in line with last year, with net cash from operating activities at £1.2bn and free cash flow at £1bn.

Basic eps of 82.2 pence was up 36.3%. Pre-exceptional eps was 67.8 pence, up 9.4%, as higher organic operating profit and lower finance charges.

Diageo said it continued to expect mid-single digit organic net sales growth and was raising its margin improvement objective from 100bps to 175bps over the three years ending 30 June 2019.

The interim dividend increased 5% to 24.9 pence per share.

Ivan Menezes, Chief Executive said: 'Our financial performance expectations for this year remain unchanged. We are confident in our ability to deliver consistent mid-single digit top line growth and 175bps of organic operating margin improvement in the three years ending 30 June 2019.'

[waldron] 23/1/2018 18:05

By Saabira Chaudhuri

LONDON -- Here's a neat story.

The documents involved are top secret. They detail a plot by a multinational company to challenge hundreds of years of tradition. Some find the suggestions so hard to swallow they are warning of rebellion.

The making of Scotch whisky has long followed a precise formula enshrined in law and precedent. Scotch must be distilled in Scotland from water and malted barley and aged in the country at least three years in oak casks. It should come out at least 40% alcohol by volume.

Now Diageo PLC, the world's single biggest producer, wants to water down some of those rules, part of its attempt to arrest Scotch's declining market share. Last year, it formed a secret task force to explore ways to change some industry rules about how Scotch must be made.

One idea was to finish aging Scotch in old tequila barrels instead of the sherry, cognac or port casks traditionally used. Another was to create a "Scotch whisky infusion," a new category of flavored or low-alcohol blends sold under existing Scotch brands.

Diageo's efforts to win over the Scotch Whisky Association, which lays down rules for distilling the spirit -- at least on its tequila-barrel idea -- are already on the rocks.

"There is not a single chance of a change of the rules," says Gavin Hewitt, a former British diplomat and one-time chief executive of the SWA. "Whoever is saying that is talking through a complete hole in their head."

The company, which makes Scotch brands such as Johnnie Walker, J&B and Talisker, and controls about 40% of the world's production, triggered an outcry once before in Scotland, which, not surprisingly, takes its Scotch seriously. In 2003, Diageo slapped the name of one of its single-malt Scotches onto a blended Scotch. Diageo called it a "pure malt." The SWA called it deceptive marketing.

A Scottish member of parliament went so far as to ask then-Prime Minister Tony Blair to intervene in the "ongoing crisis." Mr. Blair said he would "look into it." Diageo eventually pulled the product from shelves.

Diageo didn't set out last year to make trouble. It merely wanted to make Scotch tempting to more drinkers.

Ten years ago, Scotch made up about 60% of the world's whiskey market, excluding a category called "other whiskeys" that consists mainly of domestic Indian whiskey, according to according industry tracker IWSR. Since then, the share of U.S. whiskey has grown from 19% to almost 25%.

The mission of the Diageo task force, according to a document labeled "highly confidential" reviewed by The Wall Street Journal, is to explore "whether potential regulatory, technical, legal or other barriers are constraining" Scotch, and "the scope for reform."

Scotch watchers say Diageo will face stiff opposition to any rule changes -- something its task force acknowledges in the documents. One of the biggest obstacles is the SWA, an Edinburgh-based trade body that has long interpreted the rules and policed Scotch making.

The SWA "is a big old business that's funded extensively through all the old whisky producers," says Dan Jago, head of London-based Berry Bros. & Rudd, a 320-year-old wine and spirits merchant. "Anyone trying to change the rules would be fighting against the general view that it's better to protect Scotch than expand it."

Alan Park, the SWA's legal-affairs director, says producers are free to innovate however they like, but "no consumer should be misled into thinking it's Scotch when it's not."

Diageo said in a written statement that it works with the SWA on ideas that "seek to strike a balance between tradition and innovation."

The first written reference to Scotch appeared in 1494, when a Friar John Cor showed up in tax records listing "eight bolls of malt, wherewith to make aqua vitae," the water of life, according to the SWA.

Since its founding in 1912, the SWA has played a big role shaping what the country's roughly 100 Scotch distillers can and can't do.

The association was instrumental in writing what eventually became the Scotch Whisky Regulations of 2009, a British law that lays out parameters for Scotch production. European Union rules regulating spirits also apply.

Some of the rules are murky, and the association publishes guidelines to interpret them. It also gives advice, and approves or declines requests by distillers to try new approaches. It can't levy fines, but does warns distillers if they are breaking the law. It has filed suit against some it said were threatening the industry's reputation.

One of the most contested topics is finishing, which involves moving aged Scotch from its original cask to a second barrel. U.K. and EU laws don't stipulate what kinds of casks can be used for finishing.

During the past two years, Diageo executives approached the SWA's Mr. Park about using its Don Julio tequila casks to finish some of its Scotch, according to a person familiar with the matter. Mr. Park said no, this person says.

"Scotch whisky has a certain reputation attached to it based on traditional practices," says Mr. Park, who declined to comment on specific conversations with companies. "That provides the framework in which we have to operate."

After being rebuffed, Diageo's task force recommended challenging "the SWA's overreach," according to one Diageo document.

Some distillers sympathize with Diageo. Paul Miller, owner of St. Andrews-based Eden Mill Distillery & Brewery, asked the SWA in 2016 to allow him to use chocolate malt to make his Scotch.

Mr. Park offered to come and taste the drink, but voiced ambivalence: "Certain processes can still be prohibited if they lead to the production of a spirit which differs from a traditional Scotch Whisky," he emailed Mr. Miller.

"That's like saying you can't do anything to the spirit to make it taste any different," says Mr. Miller.

Mr. Park didn't stop by for a tasting, and Mr. Miller scaled back his production of chocolate malt. "Most of these rules were created to stop people passing off cheap rubbish as Scotch Whisky," Mr. Miller says. "They weren't set up to protect Scotch from a really exciting, creative, innovative craft whisky development that Scotland should be perfectly placed to take advantage of."

Write to Saabira Chaudhuri at [e-mail]



(END) Dow Jones Newswires

January 23, 2018 12:45 ET (17:45 GMT)

[waldron] 05/11/2017 16:36

31 DEC 2017
Diageo half year end

[waldron] 05/11/2017 16:26

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Diageo plans to revamp historic Dublin region
Oliver Loomes, Country Director for Diageo Ireland and Colin O’Brien, Beer and Packaging Director at Diageo at the announcement of Diageo’s plans
Oliver Loomes, Country Director for Diageo Ireland and Colin O’Brien, Beer and Packaging Director at Diageo at the announcement of Diageo’s plans

Diageo has announced plans to turn St. James Gate, where Guinness has called home for more than 250 years, into a major commercial and residential hub.

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Read More: Diageo

6 October 2017 | 0

As the country as a whole looks to the future, Diageo has announced ambitious plans transform 12.6 acres at its iconic St. James’s Gate site, in the heart of Dublin city, to create one of the most dynamic urban quarters in Ireland and Europe, in the Liberties area. To make this vision a reality, the company has commenced the search for a world class development partner.

Following significant investment since 2011 at St. James’s Gate and advances in technology, the company has the ability to brew more beer with less space and is aiming to transform 12.6 acres of its nearly 50 acre site, in a venture that will embrace new and old, to create a mixed-use development called the St. James’s Gate Quarter.

For further information on the project, visit www.SJGquarter.com

The plan in video form: hxxps://youtu.be/RkHpIfAxZco

Read more:

[waldron] 05/11/2017 11:01

FANCY MAKING A SPELLING MISTAKE IN LINK AND HEADLINE

OR JUST A SUBLIMINAL DRAM A TO PLUG THEIR OWN

[dividendwealth] 20/9/2017 12:09

Was probably due for a pullback after such a strong run?

Was just looking at Nick Train's UK portfolio and DGE was 10% of the portfolio at end of August:

[pugugly] 20/9/2017 08:15

Trading update soggy (imo) Mr Market appears not to like.

[broadwood] 16/8/2017 08:52

Making new highs daily. Largely on the back of sterling weakness.

[dow77] 27/7/2017 09:47

"Diageo targets dividend cover ... within the range of 1.8-2.2 times.

This (dividend) brings the full year dividend to 62.2 pence per share and dividend cover to 1.7 times. It is expected to maintain dividend increases at roughly a mid-single digit rate until cover is back in range."

So, all being well, perhaps in 2 or 3 years, we might expect a larger % increase in dividend.

[mozy123] 27/7/2017 09:06

Share buy back compliments the 5% divi increase.

[ygor706] 27/7/2017 09:00

Results very good with a healthy increase in the eps line. Nevertheless, a dividend increase of 5% looks a bit stingy for a company forecasting a very substantial increase in operating margins over the next 3 years.

[broadwood] 27/7/2017 08:20

Sailed through the £23 barrier on those results.


Diageo reports a consistent strong performance for the year ended 30 June with reported net sales of £12.1 billion and operating profit of £3.6bn - up 15% and 25%, respectively.

The group said this reflected favourable exchange and accelerated organic growth.

Diageo said All regions contributed to broad based organic net sales growth, up 4.3%, and organic volume grew 1.1%.

Organic operating profit grew 5.6%, ahead of top line growth, driven by good progress on productivity partially offset by implementation costs and one-off items.

Free cash flow continued to be strong at £2.7 billion, increasing by £566 million compared to the prior year, with net cash from operating activities up £584 million to £3.1 billion.

Basic eps of 106.0 pence was up 18%. Pre-exceptional eps was 108.5 pence, up 21%, as higher organic operating profit and associate income along with favourable exchange more than offset the impact of disposals and a higher tax rate.

Diageo said it continued to expect mid-single digit organic net sales growth and was raising its margin improvement objective from 100bps to 175bps over the three years ending 30 June 2019.

On 26 July 2017 the Board approved a share buy-back programme to return up to £1.5 billion to shareholders during F18.

The board has recommended a final dividend increase of 5% bringing the full year dividend to 62.2 pence per share

[philanderer] 27/6/2017 09:14

But Liberum reiterates 'sell' and 2000p target

[philanderer] 27/6/2017 09:02

Soc Gen upgrades ......... 'hold' to 'buy'

[nimbo1] 22/6/2017 15:12

I wish they wouldn't buy that - looks like a load of overpriced hype - i would rather they gave us more money.

[philanderer] 21/6/2017 17:49

George Clooney, Partners Sell Tequila to Diageo for $1 Billion

[philanderer] 19/6/2017 10:08

19th june Jefferies buy tp 2800p up from 2600p

[essentialinvestor] 19/4/2017 09:01

Still looks pretty fatly valued IMV.

[essentialinvestor] 01/2/2017 19:43

GBP weakness played a big part, however definite signs of progress.

[broadwood] 27/1/2017 08:56

Fast out of the traps again.