Guinness Ireland, part of the Diageo group, has recorded a 16 per cent increase in operating profit to £188 million (€239 million) in the year ended June 30th, 1999. Sales increased by 9 per cent to £907 million (€1.15 billion). Most of the growth was volume and prices contributed about 2 per cent.

Further growth is anticipated. The focus will be on costs and marketing, said managing director, Mr Brian Duffy. "Guinness Ireland is at the centre of a very significant global business" and costs need to be cut further. Asked if this would have implications for its 3,000 employees, he said the focus would not be on numbers but on seeking better ways of doing things. Guinness Ireland's performance in the past year has been "an exceptional one driven principally by exports of its products to overseas markets combined with a solid performance in the home market", said Mr Duffy. As a result it made a "very positive contribution" to the performance of Diageo. Capital investment continued at a high level amounting to £54 million last year. Most of this, £29 million, went on the redevelopment of the old brewery at St James's Gate.

Guinness stout, ale, and the lager brands showed a strong performance with an overall increase in their combined market share. "Guinness stout retained its pre-eminent position in the stout sector, driven by the very successful addition of the new smoother, refreshing Guinness extra-cold and the continued excellent performance of Guinness draught in a can in the off-licence trade."

Mr Duffy highlighted Smithwick's Ale whose fortunes were renewed in the latter half of 1998 and continued this year.

Budweiser showed double-digit percentage growth.

Guinness Ireland's exports grew by 13 per cent. The US was particularly strong with a 63 per cent increase in shipments.

Volume sales of Bailey's Irish Cream Liqueur were up 2 per cent. Mr Frank Fenn, managing director of Bailey's, said it was now gaining the benefits from Diageo's strategy to "focus behind key brands". There was a 6 per cent increase in its five top markets.

Bailey's sold 4.3 million cases, or 50 million bottles, last year. It should reach its target of five million cases in two to three years time, he added.

Mr Colin Storm, chief executive of the Guinness worldwide group, said an uplift in Africa more than balanced the downturn in Asia. The US was particularly good and Britain had a 5 per cent volume increase due to the withdrawal of some brands and reinvestment.

Diageo said better trading in Asia and benefits from its recent merger had boosted its annual results.

Diageo announced pre-tax profit of £1.767 billion sterling (€2.76 billion).

The result was 4.5 per cent lower than last year's figures, but Diageo executives stressed that operating profit and margins were improving.

The company, formed from a December 1997 merger of Guinness and GrandMet, saved £142 million in the period due to merger synergies, and noted that while Asian business had still not been "restored to former glories, we have seen some recovery in the second half."

North American and European sales of wines and spirits grew still further.

The Latin America market steadied and Asian trading continue to show signs of prospering.

Analysts and brokers welcomed the results.