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Last Updated: Thursday, 2 September, 2004, 07:39 GMT 08:39 UK
Dollar slide hits Diageo revenue
Bottles of Smirnoff Vodka
It has been a mixed year for Diageo
Diageo, the world's biggest spirits company, has reported a dip in full-year sales revenue after a slide in the US dollar eroded the value of exports.

The maker of Smirnoff vodka said Europe was a "challenge", while North America provided the "biggest opportunity". It reiterated profit targets set in July.

Diageo said that currency volatility knocked $105m (59m) off earnings in the year ending 30 June.

Turnover for the period was 8.89bn, down from 9.28bn a year earlier.

Health ban

Pre-tax profits before one-off items fell to 2.07bn - in line with analysts' forecasts - from 2.12bn last year

Diageo brands
Captain Morgan
Johnnie Walker
Jose Cuervo

However, operating profit ticked higher to 1.87bn from 1.79bn, which included 50m of restructuring costs to cover changes such as the closure of the Guinness brewery at Park Royal in London.

Total sales volumes worldwide rose 4% during the year.

"The global priority brands have been the key driver of the improvement we have achieved in volume growth," said Paul Walsh, Diageo's chief executive.

He added that the company has seen "continued growth in North America and in other large markets such as Africa".

Diageo noted that a smoking ban in pubs, restaurants and bars throughout Ireland may be having an effect on sales there.

It said the ban had contributed to the trend of people opting to drink at home rather than in pubs and bars.

The total volume of Guinness sold in Ireland dipped by 6%, the company said.

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