Tuesday 17 September 2019

Diageo shares hit all-time high as the pound suffers

 

Diageo approved plans to return up to £4.5bn to shareholders from 2020-2022. Photo: PA
Diageo approved plans to return up to £4.5bn to shareholders from 2020-2022. Photo: PA

David Chance

Shares of Guinness-maker Diageo hit an all-time high of £36.03 (€39.60) yesterday as the pound sank on the rising prospects of a no-deal Brexit.

Although the company is London-headquartered, most of its earnings come from outside the UK, so a weaker pound is a positive for earnings. The drinks-maker's stock has risen 29pc this year and by 96.5pc from £18.33 on June 23, 2016, when the UK voted to leave the EU in a referendum.

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The world's largest spirits company, which makes Johnnie Walker whisky and Smirnoff vodka as well as Guinness, saw its operating profit soar by 10pc to £4bn for the year ended June 30.

Its big winner last year was a 'Game of Thrones'-inspired whisky called White Walker by Johnnie Walker.

The company also approved plans to return up to £4.5bn to shareholders from 2020-2022.

While the earnings and the prospect of share buybacks have boosted the stock, it does face some possible headwinds as a potential trade war with the US could hit sales of its products in America.

Irish Independent

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