The world's biggest spirits firm Diageo has reported an expected small 1% rise in annual profits for the year ended 30 June 2004, with annual sales up 6%.
Organic operating profit grew by 7% and the company incurred restructuring costs of £50m.
In Ireland, turnover increased from £953m in 2003 to £961m, an increase of 1%. Operating profit before exceptional items was down from £131m to £126m, a decrease of 4%.
Diageo's volume declined by 4% in the full year in Ireland. The volume decline of 6% in the first half slowed to 1% in the six months ended 30 June 2004.
The company said the results for Ireland reflect the continued decline of the beverage alcohol market and the shift from the on trade, where Diageo has the majority of its business, to the off trade.
Guinness volume declined 6% and net sales (after deducting excise duties) decreased by 3%, benefiting from price increases.
Diageo's share of the total market declined 1.5% with increased competition from imported beer and the decrease in pub sales taking their toll.
Net sales (after deducting excise duty) decreased by 3%. The company said price increases on beer brands in March 2003 and June 2004 have partially offset the impact of the volume decline.
Volume in the local priority lager brands, Budweiser, Carlsberg and Harp, was down 3% again affected by the on trade to off trade switch and Smithwicks volume also declined.
The company posted earnings per share of 48.2 pence a share for the year to June 30 compared to analyst and company forecasts of around 48p, and the previous year's 47.7p.
The company warned back in July that currency impacts, largely the weaker US dollar, profit margin declines and static underlying sales growth would hit growth in its annual earnings.
Paul Walsh, CEO of Diageo said the guidance given at the July trading statement still stands as the company does not see any major changes in the trading environment. He said Europe remains Diageo's main challenge and North America continues to provide the company's biggest opportunity.
