- Diageo, purveyor of Johnnie Walker and Guinness, has announced half year results to 31 December 2022:

- Organic net sales (excluding the effect of acquisitions and currency moves) grew 9.4% due to volume growth of 1.8% and higher prices

- Organic operating profit grew 9.7%, with margins modestly higher

- Guidance unchanged: Over the medium-term, from fiscal 23 to fiscal 25, Diageo expects organic net sales to consistently grow within a range of 5% to 7% and organic operating profit to grow sustainably within a range of 6% to 9%

Charlie Huggins, Head of Equities at Wealth Club, commented:

"This is a solid performance from Diageo, underlining the strength and diversity of its brand portfolio.

While not immune from economic headwinds and inflationary pressures, Diageo looks better placed than most to weather the storm.

It is much easier to raise prices on a bottle of Johnnie Walker than on a bottle of shampoo or deodorant. So Diageo ought to have more pricing power than most consumer goods peers. This is a key reason for its resilient margins.

If the economy hits the rocks, Diageo may see some downtrading to less expensive brands. But it's unlikely consumers will cut back significantly on alcohol. And long-term premiumisation trends are unlikely to abate.

Overall, Diageo is demonstrating why it is considered a high quality long-term compounder. While short-term blips can't be ruled out, investors who abide by the famous Guinness slogan - "Good things come to those who wait" - could be rewarded."

End

*Please note that Charlie Huggins owns shares in Diageo.

For further information contact:

Jo Thorne: 07939882816, jo.thorne@wealthclub.co.uk

Wealth Club

The aim of Wealth Club is simple. To provide high net worth individuals and sophisticated investors with clear, impartial and well researched information on investment opportunities not typically available through mainstream stockbrokers or financial advisers. Wealth Club was set up in February 2016 and is now the largest non-advisory broker of tax efficient investments such as VCTs, EIS and Inheritance Tax Portfolios. Since launch 10,000 clients have invested more than £1 billion through its platform.

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