(Alliance News) - Diageo PLC on Thursday lifted its dividend despite reporting a lower interim profit as Covid-related restrictions hurt bars and restaurants.
Shares in Diageo were up 3.2% at 2,944.00 pence in London in morning trading, the best performer in the FTSE 100.
The brewer and distiller said sales for the six months to December 31 edged down 3.6% to GBP10.44 billion from GBP10.83 billion a year ago, with pretax profit falling 11% to GBP2.20 billion from GBP2.46 billion.
However, organic net sales rose 1.0%, the Smirnoff vodka maker noted, despite a hit to Travel Retail and on-trade restrictions. The on-trade market comprises outlets such as bars, restaurants and clubs, while off-trade is focused on at-home consumption. Travel Retail includes duty-free sales in airports.
"We rapidly pivoted to the channels and occasions most relevant to consumers and invested behind new opportunities. This more than offset the impact of on-trade restrictions and the decline in Travel Retail," Chief Executive Ivan Menezes explained.
Menezes added that North America, Diageo's largest market, performed "particularly strongly and ahead of our expectations".
Diageo said it expects a strong sequential performance improvement in all regions compared to the second half of the 2020 financial year, though anticipates a continued hit from on-trade restrictions and disruption to Travel Retail.
Mendez said: "We expect ongoing volatility and disruption in the second half of the year, particularly in the on-trade channel, which will make performance more challenging. The medium and long-term growth drivers and opportunities for our business remain intact and I am confident in our strategy, the resilience of our business and Diageo's ability to emerge stronger."
Diageo lifted its interim dividend by 2% to 27.9p per share from 27.41p per share the year before.
By Anna Farley; annafarley@alliancenews.com
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