-
Tips for becoming a good boxer - November 6, 2020
-
7 expert tips for making your hens night a memorable one - November 6, 2020
-
5 reasons to host your Christmas party on a cruise boat - November 6, 2020
-
What to do when you’re charged with a crime - November 6, 2020
-
Should you get one or multiple dogs? Here’s all you need to know - November 3, 2020
-
A Guide: How to Build Your Very Own Magic Mirror - February 14, 2019
-
Our Top Inspirational Baseball Stars - November 24, 2018
-
Five Tech Tools That Will Help You Turn Your Blog into a Business - November 24, 2018
-
How to Indulge on Vacation without Expanding Your Waist - November 9, 2018
-
5 Strategies for Businesses to Appeal to Today’s Increasingly Mobile-Crazed Customers - November 9, 2018
Diageo Says Currencies Will Lower Profit More Than Expected
Diageo North America expects first-half net sales to fall 2%, however, as comparisons get tougher.
Advertisement
At the same time the expected rise in interest rates in the United Kingdom and USA means sterling may rise further as investors’ cash flows out of emerging markets and into richer economies, harming Diageo’s reported revenues from those growth markets.
The drinks giant, which operates in 180 countries, has previously said that currency weakness in emerging markets would impact its operating profit by £100 million.
In a trading update for its annual meeting, Diageo said it sold more drinks in the first three months of its financial year than a year earlier.
Ivan Menezes, Diageo chief executive, said: “Our reported results will be impacted by adverse exchange rate movements which at current rates will reduce operating profit for [2016] by approximately £150 million against past year “.
“Volume has grown mid-single digit reflecting both improved volume growth trends and comparison against weakness at the start of previous year , especially in US spirits”, it said, adding that price increases have been “muted”.
Mr Menezes said Diageo will continue to build its brands through marketing and innovation, while improving its distribution network.
“This does mark a deterioration, albeit not a massive one”, James Edwardes Jones, an analyst at RBC Capital Markets said in a note today.
And developing economies will also under-deliver because of the currency swings.
Advertisement
But he retained his “outperform” recommendation and £20 price target on the shares. Ennismore – owner of London’s Hoxton Hotel – said it would be retaining the management and 900-strong workforce at the venue, which hosted last year’s Ryder Cup.