Diageo Boosts Dividend After Solid First Half

Diageo, the world's largest spirits maker, underpinned solid interim results for the first half of its financial year by extending further into the ever-growing middle class markets in emerging economies and adding price increases to its key brands in the United States.

Operating profit rose 9 percent to £2.03bn ($3.2bn; €2.37bn) in the six months ending in December 31, the company said. Group revenues advanced 5 perent to £6.04bn, largely in line with a Thomson Reuters forecast.

The drinks giant, which counts the Johnnie Walker and Baileys brands among its portfolio, increased its interim dividend for shareholders by 9 percent.

"These results reflect the global strength of our strategic brands, our leadership in the US spirits market and our increasing presence in the fastest growing markets of the world," said CEO Paul Walsh.

North American net sales grew by 4 percent in the six-month period to £1.95bn, while net European sales slipped 3 percent to £1.57bn as the region's economic struggles continued to weigh on consumers.

Net sales in Asia grew by 11 percent to £882m, despite a significant fall in South Korean whiskey sales.

"This weakness in Korea also impacted margins," said Gilbert Ghostine, President of Diageo Asia Pacific. "However, our strong pricing policy and the success of our premiumisation strategy in the faster growing markets, together with scale efficiencies in marketing in China and overhead spend reductions in the half, drove our operating margin improvement to over 100 basis points."

Diageo shares were little changed on the London Stock Exchange in early trading, falling 0.16 percent to change hands at 1,850 pence each.