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    Diageo lifts profits on higher prices

    (Photo: CARL COURT/AFP/Getty Images)

    Alcoholic drinks giant Diageo, maker of Guinness stout, Smirnoff vodka and Johnnie Walker whisky, said Tuesday that its annual net profit increased 15 per cent as higher prices offset falling sales.

    Faced with higher costs for raw materials, wages and other items as inflation soared, companies have for months hiked prices of goods and services.

    Diageo said profit after tax rose to £3.73 billion in its financial year to the end of June from £3.25 billion in 2021-22.

    While revenue climbed 11 per cent to £17.1 billion, Diageo saw volume of sales drop seven per cent, it added in an earnings statement.

    “Looking ahead… I expect operating environment challenges to persist, with continued cost-pressure and ongoing geopolitical and macroeconomic uncertainty,” said new group chief executive Debra Crew.

    She replaced long-serving boss Ivan Menezes earlier than expected following his death in June in the wake of surgery on a stomach ulcer.

    Diageo’s share price dipped following the earnings update in London afternoon deals.

    “While alcohol tends to offer resilience against macroeconomic pressures, cost inflation and global uncertainty continue to be headwinds to be mindful of for Diageo,” noted Victoria Scholar, head of investment at Interactive Investor.

    Also in June, Diageo ended its relationship with Sean “Diddy” Combs after the US rapper accused it of neglecting their business agreement and racism.

    The British multinational claimed he had misrepresented a business dispute.

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