Diageo sees glass more than half full

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Diageo sees glass more than half full

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British drinks maker Diageo is upbeat after its results came in better than forecast. In the financial year just ended the world’s biggest spirits group enjoyed a 17 percent rise in earnings.

The maker of Guinness, Smirnoff vodka and Johnnie Walker whisky saw sales fall in Europe, particularly in Greece and Spain, but emerging markets in Latin America, Africa and Asia grew strongly, and even the US enjoyed some growth.

The company set an ambitious 10 percent-plus earnings growth target it had not suffered in the same way as other drinks firms the effect of poor weather and weak consumer demand which undermined brewer Heineken.

“We have finished the year strongly, the last couple of months of July and August have continued along the same trajectory. We feel confident over the last two months,” finance director Deirdre Mahlan said on a conference call.

She also said Diageo was a more balanced business than Heineken with a broader base.

Chief executive Paul Walsh, who has set stretching new targets for his group, said: “While Diageo is not immune from a fragile global economy, this is a strong platform … Achievement of these aims would underpin even stronger dividend growth.”

European brewer Heineken had said on Wednesday weak consumer sentiment and a damp summer would wipe out its profit growth in 2011, while last week Danish brewer Carlsberg cut its 2011 outlook due to falling Russian sales.

Analysts said spirit makers were less dependent on weather and gained from strong emerging markets, with Diageo less exposed to beer and Europe than these two brewers.