Guinness maker Diageo withdraws full-year guidance

Smirnoff vodka maker Diageo on Thursday abandoned its financial forecasts as it said government-enforced lockdowns​ of pubs are damaging revenues.

The world’s largest spirits maker, also behind Guinness beer, said around 50% of Diageo’s European sales come from restaurants and pubs, while closures in the US are also causing a headache.

Diageo said in January it was expecting sales growth at the lower end of a 4-6% range for the year to June. When the coronavirus outbreak intensified in China in February it cautioned there could be a negative impact on sales and profits, and the company today ditched all forecasts. The firm also paused a £4.5 billion share buyback scheme.

But Diageo also pointed to some potential positive signs. In mainland China it is beginning to see some improvements, as restaurants have started to reopen. In the US and Europe it has seen a pick-up in sales from shops in recent weeks.

Shares in Diageo rose 55.35p to 2577.35p.