Diageo 1st Half 2018 Profit Increases; Expects Slightly Lower Tax Rate

Johnnie Walker whisky maker Diageo PLC (DGE.LN) said Thursday that pretax profit for the first half of fiscal 2018 rose 6.2% and that it expects a slightly lower tax rate due to U.S. tax reforms.

For the six months ended Dec. 31, the spirits group posted a profit of 2.20 billion pounds ($3.15 billion) compared with GBP2.07 billion in the same period a year earlier.

Net sales increased 1.7% to GBP6.53 billion from GBP6.42 billion. Scotch sales, which represents 27% of Diageo's net sales, grew 3% in the period.

The FTSE 100-listed company raised the interim dividend 5% to 24.90 pence from 23.70 pence last year.

Diageo said its tax rate for the first half of fiscal 2018 was 19.8% compared with 20.9% in the same period a year earlier. The company expects its tax rate for the year ending June. 30 to be about 20% lower than its previous guidance of 21%.

Chief Executive Ivan Menezes said Diageo's expectations for the full-year are unchanged, and the company expects to deliver mid-single digit top-line growth and 175 basis points of organic operating margin improvement in the three years ending June 30, 2019.

Write to Maryam Cockar at maryam.cockar@dowjones.com

(END) Dow Jones Newswires

January 25, 2018 02:46 ET (07:46 GMT)