- Diageo withdraws its full-year guidance and suspends dividends due to COVID-19.
- World's largest spirits maker hires Angus McPherson as its managing director in Australia.
- Diageo had forecast a £209 million hit to its 2020 profit due to Coronavirus in February.
Owing to the rising uncertainty ascribed to the Coronavirus pandemic, Diageo PLC (LON:DGE) withdrew its full-year sales and profit forecast. The largest spirits maker in the world also announced its £4.50 billion share buyback program suspended for the rest of 2020.
The company further added that the nationwide lockdowns that have also closed restaurants and bars have strongly affected its global business. In its statement on Thursday, the company reiterated that its production centers in India, Africa, and a range of other countries have been severely disrupted due to the ongoing health crisis. Africa is a key market for Diageo.
In separate news, Diageo has hired Angus McPherson of Treasury Wine Estates as its managing director in Australia.
Diageo Says Business Is Slowly Recovering In China
As the peak phase of the flu-like virus faded away in China, Diageo added, business is slowly returning to normal as restaurants and bars continue to reopen for the public.
In an estimate in February, Diageo had forecast a £209 million hit to its 2020 profit attributed to the fast spread of the deadly virus in mainland China and the broader Asia Pacific region at large.
Diageo remarked on Thursday:
“Given the global nature of the COVID-19 pandemic, and the uncertainty around the severity and duration of the impact across multiple markets, we are not in a position to accurately assess the impact of this on our future financial performance.”
The spirits maker had previously estimated a 4% to 6% growth in annual net sales. It expected its profit to grow by around one percentage point more than the net sales this year. On Thursday, however, the company withdrew its previous guidance citing the Coronavirus driven uncertainty.
Diageo Posted £1.25 Billion In Buybacks In Phase 1
In the first phase of the share buyback program that ended on 31st January, Diageo posted £1.25 billion worth of buybacks. But its multi-phase, 3-year shareholder returns program has now been suspended on Thursday for the rest of 2020.
At the time of writing, the top spirits maker is exchanging hands at 2,597 pence per share that marks a more than 15% decline in 2020 so far. Its performance in 2019, on the contrary, was recorded fairly upbeat with an annual gain of around 20%. Its downward rally in 2020 has wiped all of the gains that it posted in 2019 in the stock market.