Stout performance by Diageo as Guinness sales soar in Ireland
IRELAND is back in love with its most famous stout, with more than one in every three pints sold in pubs being a Guinness.
The figures came as its owners Diageo - which also owns Johnnie Walker Scotch whisky and Smirnoff vodka - reported a 1.8 per cent rise in half-year sales, despite being weighed down by foreign exchange rates and the sale of assets including its wine business.
Diageo said that net sales were £5.6 billion, down 5 per cent. Earnings per share were 56.1 pence.
The performance was hit by the weakness of several currencies, including the euro, the Venezuelan bolivar and the Brazilian real, against sterling - and also the sale of non-core assets.
Diageo confirmed that Guinness sales were up 5 per cent in Ireland over the six months to the end of December, giving it a market share in the Republic of 34.5 per cent. Stout sales in Britain and Northern Ireland rose by 4 per cent.
Indeed the company reported net global sales of the stout, one of Ireland's most significant exports, up 9 per cent over the period. Guinness also saw strong growth in Nigeria, with sales there jumping by 28 per cent.
Meanwhile, net sales of Baileys increased by 6 per cent, mainly driven by growth in the UK and US.
Over the half year Diageo reported a fall of £122 million in its operating profits, despite the fact that organic net sales grew by 1.8 per cent.
The company's Ireland country manager Oliver Loomes said: "In Ireland Guinness's performance accelerated with net sales up 5 per cent.
It grew 2.1 per cent in volume in the Republic of Ireland, with growth of 7.9 per cent in the off-trade and 1.4 per cent in the on-trade.
He added: "Our Guinness volume share is now at 34.5 per cent in the on-trade in the Republic, which means more than one in every three pints sold in the pub is a Guinness brand," Mr Loomes said.
Diageo chief executive Ivan Menezes said: "We have delivered volume growth, a stronger top line, improved the performance of our key brands, driven cost productivity and continued to generate strong cash flow."
But analyst James Edwards Jones described Diageo’s results as “slightly underwhelming,” adding: “It’s hard to argue that they’re ahead of plan.”