BUSINESS LIVE: Diageo gross sales dip; Saga income soar; PETS trims outlook

Aarin Chiekrie, fairness analyst at Hargreaves Lansdown:

‘Diageo served up an expectedly underwhelming set of first-half outcomes, leaving a nasty style in buyers’ mouths.

‘The Guinness brewer has a robust portfolio of manufacturers beneath its belt, together with the likes of Smirnoff, Johnny Walker and Tanqueray. Despite the range of its drinks portfolio, the group measured a small income decline within the first half.

‘Diageo’s efficiency was held again by its stumbling Latin America and Caribbean area, the place gross sales have been a lot weaker than initially anticipated. Against a robust comparable interval final 12 months, gross sales dropped by a staggering 23% as prospects right here have been consuming much less and downtrading to cheaper options.

‘Trading throughout the group’s different areas has remained constructive, pushed largely by value hikes. But on condition that the Latin America and Caribbean market is considered one of Diageo’s higher-margin territories, the gross sales decline is having an exaggerated affect on group income, which tumbled 5.4% decrease organically.

‘The revenue outlook stays murky for the second half, with markets now forecasting a small decline in working revenue. The medium-term seems barely brighter, however enhancements within the Latin American and Caribbean market might be key to future margin enlargement, and to a big extent, that’s outdoors of Diageo’s management.’

Kazakh provider Air Astana might be price as much as £757million when it lists in London subsequent month, valuing BAE Systems’ stake at £370million.

The airline – owned by the British defence large and Kazakhstan’s sovereign wealth fund – yesterday set the value vary for its preliminary public providing (IPO).

Air Astana’s float will provide BAE Systems – which owns 49 per cent of the airline – a windfall, relying on how a lot of its stake it decides to promote.

SSP Group, which operates meals shops at airports and prepare stations globally, mentioned on Tuesday it had began its new fiscal 12 months strongly, buoyed by a rebound in leisure journey, and forecast journey demand to stay resilient.

The group, which earns greater than two-thirds of its turnover from airports, mentioned like-for-like gross sales within the three months to 31 December grew by14.3 per cent year-on-year.

The Upper Crust proprietor posted an over 14 per cent gross sales progress in its first quarter, buoyed by a rebound in leisure journey, and likewise forecast journey demand to stay resilient.

‘There continues to be encouraging momentum in our key progress markets of North America and Asia Pacific and now we have additionally delivered double-digit like-for-like progress in our extra established markets of the UK & Ireland and Continental Europe,’ CEO Patrick Coveney mentioned in a press release.

Pets at Home Group has reduce full-year revenue expectations after its retail enterprise noticed progress under its expectations as prospects reduce spending on equipment for his or her pets.

The group, which additionally provides grooming and veterinary companies, mentioned it expects underlying revenue earlier than tax to be about £132million for the 12 months, in contrast with its earlier goal of about £136million.

Boss Lyssa McGowan mentioned:

‘Our colleagues got here collectively over our peak buying and selling interval to ship a document gross sales efficiency, rising towards a really sturdy efficiency within the prior 12 months.

‘While a slower market over peak meant our gross sales progress did not fairly hit the degrees we anticipated, the enterprise stays nicely positioned to learn from long run progress within the sector as we proceed to win share and develop volumes throughout meals and ship differentiated efficiency by way of our distinctive vets enterprise.

‘Importantly, we’ll shortly comply with up launching our new distribution centre with the launch of our new digital platform, in step with our goal.

‘Our new digital platform is a key basis of our progress technique, bringing vastly improved consumer expertise to our customers, and creating alternatives to enhance cross-sell into equipment and additional develop share of pockets. With these foundations now in place we’re nicely positioned for the long run.’

Ryanair has trimmed its revenue steerage for the 12 months because it grapples with the next gasoline invoice and an ongoing row with on-line journey brokers.

The price range airline mentioned it expects annual income to hit £1.66billion, down from its earlier estimate of £1.75billion.

This was a blow for chief government Michael O’Leary, who’s reportedly in line for a £85million bonus if the corporate posts a £1.8billion revenue or shares hit a goal of €21 for 28 days.

Saga expects annual underlying revenue to greater than double year-on-year, with the over-50s specialist betting on retired and rich Britons being much less impacted by the cost-of-living crunch to maintain up journey demand.

The London-listed vacation and insurance coverage firm, expects full-year income progress of 10 to fifteen per cent, it mentioned.

For the 2022/2023 12 months, Saga reported underlying pre-tax revenue of £21.5million.

In September, Saga had forecast double-digit progress in annual income and mentioned underlying income would beat market estimates.

Mike Hazell, Saga Group CEO, mentioned:

‘For 2023/24, Saga stays on monitor to ship important progress in income, along with an underlying revenue greater than double that of the prior year1, exceeding our earlier steerage.

‘Our Cruise and Travel companies have had an excellent 12 months, having taken round 120k passengers on vacation, with prospects persevering with to be drawn to the energy of the Saga model and provide.

‘As a outcome, these companies will return to profitability, in step with expectations. In Insurance, the market-wide inflationary surroundings and declining coverage volumes are persevering with to affect our efficiency.

‘The 12 months forward will see a continuation of those developments throughout our enterprise. Bookings for the brand new seasons in Cruise and Travel are strong, displaying good general progress.’

Paddy Power’s proprietor dealt one other blow to London because it set out plans to change its fundamental itemizing to New York. Shares in Flutter began buying and selling on Wall Street for the primary time yesterday following a ‘secondary’ itemizing.

And the corporate used the event to disclose it’s hoping to maneuver its ‘primary’ itemizing throughout the Atlantic – downgrading its standing in London within the course of.

Diageo missed first-half gross sales estimates after the world’s largest spirits maker suffered a pointy decline in the important thing markets of Latin America and the Caribbean.

The maker of Johnnie Walker whisky and Tanquery gin reported a 0.6 per cent fall in natural internet gross sales for the six months ended 31 December, barely lacking analyst estimates for flat natural gross sales.

Diageo warned in November that gross sales in Latin America and the Caribbean have been set to say no by over 20 per cent amid a build-up of unsold inventory in Mexico and Brazil, the place drinkers have been shopping for much less premium spirits.

Boss Debra Crew mentioned:

‘As beforehand introduced in November 2023, materially weaker efficiency in LAC, pushed by fast-changing shopper sentiment and excessive stock ranges, considerably impacted complete enterprise efficiency.

‘Having performed a evaluate of stock ranges and monitored efficiency within the crucial vacation season, now we have taken motion and have additional plans to scale back stock to extra acceptable ranges for the present shopper surroundings within the area by the tip of fiscal 24. This is a key precedence.’