(Alliance News) - Diageo PLC on Thursday said new product innovation helped it to grow profit ahead of market expectations in its most recently ended financial year.
The FTSE 100 listed company also said that it will return further GBP4.5 billion to shareholders.
Diageo shares were down 2.1% in London at 3,307.00 pence each in morning trade.
The alcoholic beverages company reported pretax profit of GBP4.24 billion for the year to the end of June compared to GBP3.74 billion a year prior, as sales rose to GBP19.29 billion from GBP18.43 billion. Net sales were 6% higher at GBP12.87 billion, in line with analysts' expectations.
"Diageo has delivered another year of strong performance. Organic volume and net sales growth was broad based across regions and categories, with new product innovation being a strong contributor," said Chief Executive Ivan Menezes.
The market expected Diageo to post organic operating profit growth for financial 2019 of 8.7%. On Thursday, the company beat the consensus after reporting organic operating profit growth of 9.0% to GBP4.04 billion.
The growth was driven by lower exceptional operating charges, and favourable exchange, partially offset by acquisitions and disposals.
Diageo declared a full-year dividend of 68.6 pence, up 5% from 65.3p paid the year ago.
At the end of July 2018, the FTSE 100-listed company approved a GBP2.0 billion share buyback, which was expected to be completed during financial 2019. In December 2018, the share repurchase programme was increased by GBP340 million.
Diageo in January further extended its share buyback programme by GBP660 million, bringing the total programme to up to GBP3.0 billion.
In the year to the end of June, 94.7 million shares were repurchased for an aggregate consideration of GBP2.8 billion, Diageo said. After the year end, a further 300,000 shares were purchased for an aggregate consideration of GBP26 million.
On Thursday, the company said it intends to distribute up to GBP4.5 billion to its shareholders in the period between financial 2020 to financial 2022.
Looking ahead, Menezes added: "In the medium term I expect Diageo to maintain organic net sales growth in the mid-single digit range and to grow organic operating profit ahead of net sales in the range of 5%-7%."
Diageo (DGE)
