Spirits group Diageo has reported a 3 per cent rise in annual profits but said it will be a challenge to meet its financial targets in the current year.
The group, which markets Guinness, Smirnoff vodka and Johnnie Walker scotch, reported pre-tax profits for the year to June 30th before exceptionals and goodwill of £2.043 billion sterling ($3.19 billion) after £1.980 billion, compared to analysts' forecast of £2.036 billion to £2.078 billion.
Diageo said organic sales growth of its premium drinks business slowed to 9 per cent in the year after seeing 11 per cent growth in the first half, reflecting a warning the group gave in July of slower growth.
Diageo has increased its focus on alcoholic beverages recently. It sold Burger King last month for $2.26 billion, in a deal to be completed later this year; sold US food group Pillsbury for $10.5 billion last year; and jointly bought Seagram's drinks business at the end of 2001.