Diageo drinks sales soar

Drinks sales rose sharply last autumn

The drinks and catering giant Diageo has reported a near £1bn rise in profits from its existing drinks operation during the last six months of 2001.

Pre-tax profits rose to £1.23bn ($1.75bn) from a year ago before one-off expenses which were in part due to the restructuring of its Burger King fast food chain.

During the same period a year earlier, Diageo made £1.19bn in pre-tax profits.

Operating profits from its premium drinks operations - which include Guinness, Johnnie Walker, Smirnoff and Baileys - rose 17% to £967m.

The strengthened performance of its drinks group boosted turnover by 9% to £6.48bn.

Pre-tax profits came in at £1.23bn.

"This financial year has begun well and in the first half Diageo has delivered on both its strategic and operational objectives," said chief executive Paul Walsh.

Burgers

Diageo is pushing ahead with its plans to separate Burger King from its drinks operations.

Operating profits fell 29% at Burger King to £79m during the July to December period.

This was mainly due to restructuring costs.

Diageo said a turnaround for Burger King would come soon.

Popular drinks

Diageo's drinks division's strongest markets, the UK, United States and Spain, saw strong sales.

Smirnoff Ice boosted sales of the vodka by 26% in the US.

Baileys marketing campaigns lifted sales 11% globally and 30% in the UK.

"Our premium drinks business has had an outstanding six months with operating profit up 17% and increasingly that is what Diageo is all about, a focused premium drinks business," chief executive Paul Walsh told the BBC's World Business Report.

Diageo shares rose 0.6% in early trading as traders quietly cheered the widely predicted figures.