More on Diageo
Diageo: trading statement
Thursday, 29 June 2006
Organic sales growth continued to be strong at 6% and the company’s guidance for profit growth remains unchanged.
There are very few other actual numbers given in the trading statement, but it appears that the key driver remains volume growth in Diageo’s priority brands (its big, heavily marketed brands like Smirnoff, Johnnie Walker, Guinness etc.
At 912p Diageo is on a similar rating to when we last looked at it: a prospective PE of 17.5×, a price/FCF of 20×, and a 3.4% yield. The strong, consistent organic growth justifies a high rating, but even for this quality this is a high price to pay.
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