Guinness owners Diageo reported half-year earnings at the top of forecasts with a 26 per cent rise, but cut its profit growth target due to the global economic slowdown.
The world's largest drinks group also announced a restructuring programme today aimed at cutting £100 million from its cost base, to be seen largely in its 2009-10 financial year.
Last month the company placed on hold plans to invest €50 million in new brewery operations in Ireland due to the sharp deterioration in the economy. It plans to carry out a review of its investment plans here.
Its shares fell 5.9 per cent to 854 pence in early trading.
The London-based maker of Johnnie Walker whisky, Smirnoff vodka and Guinness beer reported underlying earnings per share of 45.6 pence for the six months to December 31st, compared with a consensus of 43 pence and a range of 40.9 to 46.8 pence.
But Diageo said the global slowdown had led it to cut its target for full-year operating profit growth to 4 to 6 per cent from 7 to 9 per cent previously.
“Current economic trends indicate that consumer confidence will reduce further and the outlook for the second half is more difficult to predict," chief executive Paul Walsh in a statement.
Underlying first-half sales rose 3 per cent with underlying operating profit up 6 percent and underlying earnings ahead by 9 per cent. Exchange rate movements increased operating profit by £103 million.
Diageo sees a double-digit percentage rise in full-year earnings. It said it did not expect to reopen its share buyback programme in the current year after buying back £352 million of share in the first-half.
The interim dividend was raised 5.3 per cent to 13.9 pence.
Diageo shares have outperformed the British market, outpacing the FTSE 100 index by nearly 20 per cent but have underperform the DJ Stoxx European food and beverage index by 5 per cent in the past 12 months.
Last month, its arch-rival France's Pernod Ricard said its July-December operating profit would rise 8 percent but gave no prediction for its full year to end-June. Pernod reports half-year figures on Friday, February 13th.
Reuters