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Serial FTSE 100 struggler
A phrase of warning. My glass has at all times been half full with Diageo. Each time the shares have fallen within the final two-and-a-half years, I’ve added one other chunk to my SIPP. At this time, its glass seems to be fairly empty. But I’m nonetheless tempted.
This morning, the Guinness and Johnnie Walker maker minimize full-year 2026 steerage for the second time in three months, with natural web gross sales anticipated to fall by 2%-3%. Sturdy progress in Europe, Latin America and Africa was greater than offset by sluggish US gross sales, the place cash-strapped customers are buying and selling commerce down from Diageo’s premium manufacturers to cheaper alternate options. Chinese language white spirits additionally continued to wrestle.
That’s an actual blow, particularly because the shares had began to stir, rising round 10% over the past month. Now they’re down 15% over one 12 months and a painful 48% over three.
Dave Lewis should flip this inventory round
I’m deeply dissatisfied by the dividend minimize. The one comfort of a falling share worth was the prospect of a better yield, which was nearing 5%. Now we’re again across the previous 2%. Lewis must justify that sacrifice by delivering baggage of progress, and climbing the dividend when the nice occasions return. Assuming they do.
He insists he already sees important alternatives to behave extra decisively, sharpen competitiveness and broaden the portfolio to drive greater progress. Financial savings from slashing the dividend will strengthen the steadiness sheet and enhance monetary flexibility. Let’s hope he’s proper.
