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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Diageo plc    DGE   GB0002374006

DIAGEO PLC

(DGE)
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Delayed Quote. Delayed London Stock Exchange - 11/27 11:39:53 am
2933 GBX   +0.15%
11/27DIAGEO : Upgraded to Buy by Morgan Stanley
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11/25DIAGEO : Credit Suisse gives a Buy rating
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11/23DIAGEO : makes big sustainability promises
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Kenyan brewer EABL looks to scotch, low-priced beer to counter tax rises

07/26/2019 | 07:03am EST
FILE PHOTO: Crates of beer are transported on a folklift from the production line inside the East African Breweries Limited factory in Ruaraka factory in Nairobi

NAIROBI (Reuters) - Kenya's East African Breweries is counting on surging demand for its low-priced Senator Keg beer and also scotch whiskey to counter the impact of tax increases, its chief executive said on Friday.

The brewer, which is controlled by British drinks group Diageo, on Thursday reported a 52% jump in pretax profit for the year to June as volumes grew 11% and sales surged 12%.

The strong performance partly reflected much weaker comparatives for previous financial year, as well as a stable business environment and higher production capacity.

But a plan by Kenya's government to increase excise duty on spirits by 15% in September, well above the inflation rate of 5%, could cloud the company's outlook.

"(This) is why we have got some time to try and have the debate with our stakeholders in government as to the wisdom of such a significant increase," Andrew Cowan, East African Breweries' CEO, told Reuters after an investor briefing.

Sales of Senator Keg, a low-priced lager made from locally grown sorghum, rose by close to a third in the last financial year, which will help to offset the impact of higher taxes from September.

Senator Keg has been one of the fastest growing brands for EABL in recent years due to huge demand from price-sensitive consumers, some of whom have been switching to branded beer from home brews, some of which are illegal.

A new Senator Keg plant in the western city of Kisumu is expected to double output to full capacity by year-end, the CEO said.

Cowan said growing demand for scotch whiskey like Johnny Walker and Singleton among consumers could also counter the potential headwinds for the business from the taxes.

"There is a wonderment about scotch... consumers find it very aspirational and very cool to be seen to be drinking scotch," he said.

(Editing by Jane Merriman)

By Duncan Miriri

Stocks treated in this article : Diageo, East African Breweries Ltd

© Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
DIAGEO PLC 0.15% 2933 Delayed Quote.-8.36%
EAST AFRICAN BREWERIES LIMITED 0.00% 155 End-of-day quote.-21.91%
JUST GROUP PLC 0.79% 57.65 Delayed Quote.-27.03%
WILL GROUP, INC. 0.91% 999 End-of-day quote.-20.21%
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Financials
Sales 2021 11 946 M 15 900 M 15 900 M
Net income 2021 2 632 M 3 504 M 3 504 M
Net Debt 2021 13 253 M 17 639 M 17 639 M
P/E ratio 2021 25,7x
Yield 2021 2,40%
Capitalization 68 478 M 91 272 M 91 137 M
EV / Sales 2021 6,84x
EV / Sales 2022 6,39x
Nbr of Employees 27 788
Free-Float 90,8%
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Technical analysis trends DIAGEO PLC
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 3 056,08 GBX
Last Close Price 2 933,00 GBX
Spread / Highest target 24,8%
Spread / Average Target 4,20%
Spread / Lowest Target -18,2%
EPS Revisions
Managers
NameTitle
Ivan M. Menezes Chief Executive Officer & Executive Director
Javier Ferrán Larraz Chairman
Kathryn A. Mikells Chief Financial Officer & Executive Director
Alan James Harris Stewart Independent Non-Executive Director
Nicola S. Mendelsohn Independent Non-Executive Director