Sales and profits up at Diageo as Brexit brings sales boost

Drinks giant Diageo has toasted a brighter outlook after securing a hefty jump in sales and profits thanks to a leg up from the Brexit-hit pound.

The Guinness and Baileys owner said operating profit surged 25% to £3.6 billion for the year ending in June, while reported net sales climbed 15% to £12.1bn over the period.

The group was boosted by healthy growth in international markets and strong scotch sales, while sterling’s weakness laid the foundations for an extra lift when translating overseas earnings back into pounds.

Stripping out acquisitions and currency movements, annual operating profit grew by 6% to £3.6bn.

Chief executive Ivan Menezes said: “We have delivered consistent strong performance improvement across all regions and I am pleased with progress in our focus areas of US Spirits, scotch and India.

“Our productivity work is delivering ahead of expectations allowing us to reinvest in our brands, drive margin improvement and generate consistent strong cash flow.”

Shares soared nearly 7% in morning trading on the London Stock Exchange, as the firm hiked its profit margin growth target, raised the annual dividend by 5% and announced a £1.5bn share buy-back scheme to be paid out in 2018.