The Irish operations of Diageo, the merged Guinness and Grand Metropolitan group, said yesterday it had recorded steady growth for the 12 months to the end of June, but while the entire group's profits were in line with market expectations, shares fell on worries about Asia and the strength of sterling.
Guinness Ireland group said its turnover was up 6 per cent to £831 million, while operating profits at the core brewing business rose by 10 per cent to £161 million. Volumes at Guinness Ireland rose by 3 per cent, while Bailey's, the makers of Irish Cream, said volume climbed 4 per cent.
Diageo as a whole reported profits down 4.2 per cent at £1.85 billion sterling. The company blamed the slowdown on the economic slump in Asia and the strength of sterling.
Including exceptional items, however, pre-tax profit rose 30 per cent to £1.683 billion sterling. Turnover fell 7.4 per cent to £12.029 billion sterling.
Guinness Ireland's managing director, Mr Shaun Holliday, said his operations had hit all of their volume and profits targets, and that he was very happy with the results. Since June, he added, the company had maintained a similar momentum.
Sales of Budweiser and Carlsberg in particular had grown ahead of the market, he said, while off-trade volume, led by Canned Guinness Draft, had risen by more than 12 per cent.
Mr Frank Fenn, managing director of Bailey's, said he was pleased with progress made by the Irish Cream product, which had made strides in Latin America and Asia. In Spain, he added, volume had risen by 14 per cent.
Mr Holliday said that while he had not yet studied the Competition Authority's report on liberalisation of the public house sector, he could see two valid positions in the current debate. While the company would welcome more pubs for its products, he felt publicans who had invested heavily in their premises could make a case for having more time to reap the returns.
Diageo's chief executive, Mr John McGrath, said whiskey sales had softened in Brazil, Colombia and Venezuela but insisted that the world's largest spirits group was in "good shape" to take on whatever was thrown at it.
While trading conditions in Asia were poor they had not got any worse, he added.
"Eventually the effects of what is happening in Asia and Latin America, if it does get worse, will feed through," Mr McGrath said. "Many economists think Brazil will go into negative growth next year.
"But we feel pretty good about things and we know we can manage whatever hits us. We are in good shape," he said.
Diageo makes about £167 million sterling in annual profit from Latin America, the equivalent of 8.5 per cent of group earnings.
"I think everyone in industry is uneasy about what is happening in the world. In Asia we have got our stock levels down and we have got no problems in collecting debt," said Mr McGrath.
The group also warned that profits from Pillsbury may be lower in the first half of the year.