Diageo, the world's largest spirits company, announced a £2 billion share buyback programme today and better-than-expected sales growth for the full year, helped by a gin boom in Western Europe. 

The maker of Guinness, Johnnie Walker Scotch and Smirnoff vodka reported net sales of £12.2 billion, up 5% on an organic basis.

This was higher than the 4.3% growth forecast in a consensus supplied by the company. 

The company said its Tanqueray gin performed well in Europe and the launch of Gordon's pink gin also offered a boost. 

Earnings per share, at 118.6 pence, also beat forecasts. 

Diageo stood by its mid-term expectations, saying it still anticipated mid-single digit organic net sales growth and 175 basis points of organic operating margin expansion for the three years ending 30 June 2019. 

But it forecast some near-term headwinds for the new financial year that started in July, regarding currency exchange rates, tax and interest rates that helped push its shares lower. 

Diageo said foreign exchange rates would reduce full-year sales by £70m, and operating profit by £10m. 

It also said it expects a tax rate of 21-22%t, up from 20.7% in the year just ended, and expects higher interest rates to increase its borrowing costs. 

Diageo said it approved a share buyback programme of up to £2 billion for the year ending 30 June 2019.

Today's results show that Diageo's net sales in Ireland increased by 3%, with sales of Guinness up 2% on the continued success of Hop House 13 Lager and the launch of its "Behind every town" ad campaign across the country. 

In spirits, net sales in Ireland were up 14% largely on the back of strong performances in Gordon's and Tanqueray.

During the six month period, Diageo said that sales of Guinness in Europe rose 6% driven by a good performance for draught and supported by double digit growth in Hop House 13 Lager.

Meanwhile, in Nigeria Guinness sales jumped by 24%, as it benefitted from the football World Cup.