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(Alliance News) - Diageo PLC on Wednesday said it has started 2021 with a "good recovery across all regions", aided by partial re-openings of bars and restaurants across Europe and Latin America.
The brewer of Guinness and distiller of Johnnie Walker said its performance in North America has remained "particularly strong", while Europe has benefited from robust off-trade sales. The distiller said it now expects organic operating profit growth to be at least 14% in the current financial year, which ended June 30, slightly ahead of organic net sales growth.
As a result of its trading performance, Diageo said it will restart the return-of-capital programme of up to GBP4.5 billion to shareholders that was first announced back in July 2019 but suspended in April 2020. It is initiating the second phase of the programme of up to GBP1.0 billion to be completed by the end of the 2022 financial year. As such, it has entered into an agreement with UBS to buyback shares worth up to GBP500 million until November 12. The programme completion date was extended by two years to June 2024.
"The board's decision to resume our return-of-capital programme at this time reflects Diageo's improved performance in the first half of fiscal 2021, the continued strong recovery of our business, and our expectation that we will be back within the top end of our target leverage ratio of 2.5-3.0x at 30 June 2022, post completion of the second phase of the return of capital programme," said Chief Executive Ivan Menezes.
Shares in Diageo were up 3.1% at 3,287.00 pence in London in morning trading.
By Will Paige; willpaige@alliancenews.com
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