Diageo Raises a Toast to Success of Smirnoff and Baileys Brands; DRINKS: Company Posts Increase in Half-Year Profits and Says Strong Sales Will Help Offset Tough Economic Conditions at Burger King Chain

Article excerpt

DRINKS giant Diageo toasted the ongoing success of its Smirnoff and Baileys brands yesterday as it posted an increase in half-year profits.

The company said strong sales of the two big ticket drinks helped offset tough economic conditions and the ongoing shake-up at Burger King.

Operating profits at Burger King tumbled 29pc in the six months to the end of December as Diageo spent heavily on reviving the chain.

Diageo hopes to separate Burger King from its core drinks business, and said it had begun to see a turnaround at the chain with like-for-like sales on the way up.

But it said the "star performers" in the half-year were its global priority drinks brands, which also include Guinness, Johnnie Walker and Cuervo.

Net sales growth across Diageo's drink brands was 11pc in the halfyear to pounds 3.34bn, buoyed by a strong showing in the UK, United States and Spain.

The launch of Smirnoff Ice in the US saw the vodka brand record sales volume growth of 26pc in the firsthalf.

Baileys' volumes rose 11pc worldwide and by 30pc in the UK as the brand benefited from recent marketing campaigns.

The growth helped Diageo's pretax profits for the half-year rise to pounds 1.23bn before one-off costs, compared with pounds 1.19bn a year ago.

Chief executive Paul Walsh said, "This financial year has begun well. …