Diageo: Guinness speculation denied
(CercleFinance.com) - Diageo on Sunday denied speculation about a possible sale of its Guinness beer brand and its stake in LVMH-owned champagne house Moët Hennessy.
We note recent press reports about the Guinness brand and our stake in Moët Hennessy and can confirm that we have no intention of selling either, the British spirits giant said in a brief statement.
Diageo's share price rose over 4% on Friday following the publication of a Bloomberg article reporting a possible sale or demerger of Guinness, as well as a review of its stake in Moët Hennessy.
Following yesterday's denial, the share price was down over 0.5% on Monday morning on the London Stock Exchange.
In a reaction note, analysts at RBC believe that there are other ways for the group to cope with the current complicated operating environment.
What we expect, or at least hope, is that the management team will abandon its objectives of organic growth and Ebit progression of 5% to 7% over the medium term, the Canadian broker explains.
For the broker, the priority today is to reduce investments in fixed capital and working capital, which would boost cash flow and accelerate debt reduction.
RBC is also calling for a firmer approach to cost control, particularly in marketing, where Diageo's spending has been far too uncontrolled, it concludes.
Diageo plans to publish its interim results on 4 February, prior to an investor meeting which will focus on Guinness on 19 and 20 May.
Copyright (c) 2025 CercleFinance.com. All rights reserved.
We note recent press reports about the Guinness brand and our stake in Moët Hennessy and can confirm that we have no intention of selling either, the British spirits giant said in a brief statement.
Diageo's share price rose over 4% on Friday following the publication of a Bloomberg article reporting a possible sale or demerger of Guinness, as well as a review of its stake in Moët Hennessy.
Following yesterday's denial, the share price was down over 0.5% on Monday morning on the London Stock Exchange.
In a reaction note, analysts at RBC believe that there are other ways for the group to cope with the current complicated operating environment.
What we expect, or at least hope, is that the management team will abandon its objectives of organic growth and Ebit progression of 5% to 7% over the medium term, the Canadian broker explains.
For the broker, the priority today is to reduce investments in fixed capital and working capital, which would boost cash flow and accelerate debt reduction.
RBC is also calling for a firmer approach to cost control, particularly in marketing, where Diageo's spending has been far too uncontrolled, it concludes.
Diageo plans to publish its interim results on 4 February, prior to an investor meeting which will focus on Guinness on 19 and 20 May.
Copyright (c) 2025 CercleFinance.com. All rights reserved.