Free cash flow was reported at £2.7bn, an increase of £566m compared to the prior year, with net cash from operating activities up £584m to £3.1bn.
“We delivered a strong set of results including broad based improvement in organic net sales and operating profit,” said Ivan Menezes, Diageo chief executive.
Organic operating profit also grew 5.6%, ahead of top line growth, driven by progress on productivity partially offset by implementation costs and one-off items.
Menezes added: “Our productivity work is delivering ahead of expectations allowing us to reinvest in our brands, drive margin improvement and generate consistent strong cash flow.”
REGIONS
Diageo owns more than 200 alcohol brands which are sold in 180 countries around the world, and Menezes is pleased by the process made in Diageo’s key target regions.
He added: “We have delivered consistent strong performance improvement across all regions and I am pleased with progress in our focus areas of US Spirits, scotch and India.”
SHARES
There is also good news for investors. Yesterday (26 July) the board approved a share buy-back programme to return up to £1.5bn to shareholders, hoping for a final dividend increase of 5% - bringing the full year dividend to 62.2 pence per share.
Menezes continued: “Following three years of consistently improving cash flow generation, the board at Diageo has approved a share buy-back programme of up to £1.5bn.
“We continue to expect mid-single digit top line growth, and we are raising our operating margin expansion objective to 175bps (basis point) over the three years ending 30 June 2019.
“Diageo is a strong company today and we are confident in our ability to deliver sustainable growth. We are raising our productivity goal to £700m with two thirds being reinvested in the business.”
