UK's Travis Perkins posts 24% drop in first-half adjusted operating profit
The company reported an adjusted operating profit of 63 million pounds ($83.63 million) for the six months ended June 30, down from 83 million pounds a year earlier, after excluding discontinued operations.
($1 = 0.7533 pounds)
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Times
16 minutes ago
- Times
Is this a good time to buy shares in Diageo?
The latest annual results from Diageo give every impression of papering over the cracks, reporting flat sales and lower profits, having lost a chief executive. Nik Jhangiani, the interim chief executive, produced as much positive spin as he could, even on the supercharged $625 million cost-saving programme, but could not disguise a 'challenging' environment led by rapidly changing tastes that, in the US at least, extends to competition from cannabis drinks. Operating profits fell 27.8 per cent to $4.3 billion, but before $1.4 billion of exceptional items the reduction was trimmed to 0.7 per cent, giving a healthy 21.4 per cent profit margin. The main exceptional was the sale of the US-based Ciroc subsidiary. Net profit was 39.1 per cent lower at $2.5 billion, translated into a similar-sized drop in earnings per share to 105.9 cents. That has just about let Jhangiani pay a 62.98 cents final dividend to maintain the annual payout at 103.48 cents. The stock market's reaction was to mark the shares up 89p to £19.04, suggesting investors were expecting worse. We will not have a clear picture of where the group is heading until the board confirms Jhangiani in the top job or hands it to someone else, probably in October. Whoever it is will have to do something drastic to halt Diageo shares' steady three-year decline. As Jhangiani said: 'We have a lot to do.' The stop-gap plan is to cut costs even more, promote the group's current winning brands — Guinness stout, Don Julio tequila, Johnnie Walker scotch and the blackberry-infused Canadian whisky Crown Royal — and move as quickly as possible to catch the surprisingly rapid transition to low-alcohol drinks. While no one brand can on its own put a rocket under annual sales of $20.2 billion, Jhangiani dropped hints yesterday that his researchers are stretching every sinew to come up with an alcohol- and calorie-light successor to longstanding hits such as Baileys Irish Cream. They have taken 40 per cent of the calories out of that with Baileys Deliciously Light, but so far have been unable to do without the alcohol. Meanwhile, Jhangiani is desperately trying to get his head around the unpredictable leisure habits of Gen Z, who are influenced by health considerations, other claims on their wallets and less compulsion to hit the bars on a night out. 'We need to make sure our offerings are tailored to social occasions,' he said. A lot of that boils down to moderation, the catch-all management term for no and low alcohol. While Guinness 0.0 has become a banker brand, the picture is fuzzy elsewhere. Price resistance is turning into shrinkflation with smaller spirits bottles in Asian supermarkets. And that is also influencing the alcohol content of ready-made cocktails. Overhanging the price question is President Trump's tariff campaign, which is due to add 10 per cent to UK exports to the US and 15 per cent on dispatches from Europe. Diageo reckons this could cost it $200 million a year at the operating profit level, mainly affecting the group's lucrative spirits brands. However, Jhangiani hopes to be able to offset as much as half of that with clever pricing. The Scotch Whisky Association buttonholed Trump on his recent Scottish visit to point out that if production were moved to the US, the product would no longer qualify as scotch. While gin, vodka and other spirits are a different matter, it will take years and plenty of capital to build distilleries in the US. However, Diageo has made a start with a factory in Alabama. Demand in the US and China is expected to be weaker for some time, and Europe is fragmenting. The group's former southern Europe sales force is being broken up into separate Spanish, French and Italian units to cater for different tastes. That adds to the costs that Jhangiani is trying to squeeze, while protesting that this need not mean job cuts. 'We want more feet on the street,' he said. Despite Monday's positive stock market response, in the face of strong headwinds for the next few years the company does not yet have a workable recipe to take the shares back up to anywhere near their 2022 level. Maybe it will have to turn into a full-blown soft drinks company. Advice AvoidWhy Future unclear until the CEO issue is sorted out
Daily Mail
33 minutes ago
- Daily Mail
Getting older 'is driving Gen Z to drink'... and alcopops are coming back in fashion
Alcopops are making a comeback as Gen Z drops sobriety and picks up bottles amid a growing trend of young people drinking more. Nik Jhangiani, interim chief executive of Diageo, the makers of Smirnoff Ice and Guinness, said that as Gen Z clamour for canned cocktails and alcopops, there was a 'huge opportunity' to win over a notoriously anti-drink generation. Jhangiani said the latest generation to hit up pubs and nightclubs bucked the typical trend of being introduced to alcohol through beer, instead choosing spirits and pre-made cocktails. The Diageo boss, who was made interim CEO after the firm parted ways with previous leader Debra Crew, said that the firm was looking to serve up 'a huge range of choices' to young people, who would have more flavour and calorie choices. He pointed out that his firm had once been a leader in the alcopops business, thanks to the Smirnoff Ice bran, and that the company would soon 'rightfully have the ability to gain that [position] back', pointing to a new advertising campaign for the brand across nearly two dozen countries in June. Jhangiani's comments come after data from drinks firm IWSR showed 73% of Gen Z have consumed alcohol in the last six months, a massive rise from two years ago when the figure was just 66%. Richard Halstead, the head of consumer insights at IWSR, suggested previous surveys indicated that young people were drinking due to cost of living crisis. He said: 'The idea that Gen Z drinkers are somehow fundamentally different from other age groups isn't supported by the evidence. For instance, we know that beverage alcohol consumption correlates with disposable income, and Gen Z came of age during a cost of living crisis. 'Rising prices have been especially acute in bars and restaurants — places that appeal most to Gen Z drinkers. 'With every year that passes, more Gen Z drinkers are entering the workforce, and those already in the workforce are typically earning more.' Gen Z still remains less likely to drink than the rest of the population, with the survey finding that millennials, those aged between 28 and 44, were the most likely to drink. In the past six months, 83 per cent of millennials said they had drunk alcohol followed by Generation X at 79 per cent. Meanwhile, only 72 per cent of baby boomers, people aged 60 and over, consumed over the same time period. The research found that Gen Z drinkers were most likely to engage in 'intermittent abstinence', as nearly 60 per cent had done so compared to 40 per cent of all drinkers. Halstead believes the survey results were positive for alcohol businesses, and sys that the recent struggle is 'definitely not the fault of Gen Z' He added: 'The good news for the beverage alcohol industry is that, while moderation is set to be a long-term factor, consumption is not in a tailspin. 'According to this evidence, much of the recent decline is cyclical, not structural — and is definitely not the "fault" of Gen Z.'
Daily Mail
33 minutes ago
- Daily Mail
The countries where you can earn more than the UK
Many Brits put in dozens of hours at work each week, while their wages barely grow. The average worker in the UK works for 1,524 hours a year, earning a median of £45,688, according to the Organisation for Economic Co-operation and Development (OECD). Research by Remitly has revealed there are places abroad where Brits could bank the same while putting in hundreds of hours less. Eight out of the top ten countries are in Europe too, so British workers wouldn't need to travel far. Luxembourg ranked the highest, with an estimated hourly rate of £48.69 it's a big leap from the UK's average of £29.98. Workers in the Western European country only need to be at their desks for 125 days to bank the average UK salary. That's a huge 78 days difference in the number of working days needed in Britain. The average Luxembourger could work 480 hours less a year and still match the UK median wage, according to the analysis. However, it's important to note the cost of living in Luxembourg is 14% higher than in the UK. Iceland followed closely in second place, with employees banking £47.87 on average. Workers will only have to put in 127 days to match the British salary, meaning 76 days less. However, the cost of living is a whopping 41.5% higher compared to Britain. Norway came third, with an estimated hourly pay of £40.25, meaning employees could work 151 days and match the UK average salary. It may not stretch as far though, with the cost of living being 21% more in Norway. Denmark, Austria and Sweden were all similar, with 153, 155, 155, and 157 days needed to match Brits and their pay. In Germany, the cost of living is around 1% less than the UK and the hourly rate averages at £38.81. This means workers could put in 46 fewer days a year and still match the median British salary. America ranked eighth, followed by Australia and Sweden that have average hourly rates of £35.31, £32.23 and £32 respectively. Meanwhile, workers in Mexico would have to put in 6,211 hours to match the UK's salary. That's the same as more than 8.5 months of working every day, according to the study.
