Limited edition White Walker boosts profits for Diageo

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The successful launch of a limited edition Johnnie Walker whisky based on the supernatural White Walker from the TV series Game of Thrones helped Diageo boost profits and the British spirits group announced Thursday it will return billions of pounds to investors.

Profits and sales at Diageo may not have been dead, but the White Walker helped them rise nonetheless, with net earnings climbing 4.6% to 3.16 billion pounds (3.5 billion euros, $3.9 billion) in the firm’s fiscal year that ended on June 30.

Sales meanwhile increased 5.8% to 12.9 billion.

“Diageo has delivered another year of strong performance… with new product innovation being a strong contributor,” said chief executive Ivan Menezes.

Among spirits, the sale of scotch whisky, which accounts for a quarter of the total, climbed by 6%.

“Scotch growth was driven by Johnnie Walker, which delivered a strong performance with net sales up 7%, benefitting from the successful launch of ‘White Walker by Johnnie Walker’ inspired by the TV series Game of Thrones,” said Diageo.

Sales of vodka returned to growth, led by Smirnoff, while sales of gin, which includes the Tanqueray and Gordon’s brands, jumped by 22%.

Beer sales, which includes Guinness, rose by 3%.

Diageo, which just ended a share buyback programme worth nearly 3 billion pounds, announced it will return 4.5 billion pounds to investors over the 2020-2022 period.

“At first glance you might have expected the numbers to leave investors feeling refreshed,” said Russ Mould, investment director at AJ Bell, pointing to free cash flow and earnings coming in slightly below expectations.

“A premium priced stock like Diageo can’t afford even a modest miss on estimates if a hangover is to be avoided,” he added.

The firm’s shares were down 2.3%in morning trading in London, where the FTSE 100 index of blue chip stocks was up 0.2%.