Diageo shares rise despite fall in profits

Diageo posted an expected fall in annual profits, but its shares rose as it doubled its share buyback programme and said pickup…

Diageo posted an expected fall in annual profits, but its shares rose as it doubled its share buyback programme and said pickup in growth was expected this year.

The maker of Guinness, Smirnoff vodka and Johnnie Walker scotch expects growth to be boosted by bigger price rises, cost cutting and a steadying of the ready-to-drink market for products such as Smirnoff Ice.

The group posted pretax profits for the year to June 30th of £2.003 billion ($3.57 billion) before exceptional items, down 3 per cent but in line with analysts' forecasts.

Diageo faces tough markets across most of Europe in spirits and in Britain, Ireland and Nigeria in beer, but the company said it had the brands and marketing spend to counter these problems during the current year.