Diageo to report slight dip in profit

GUINNESS maker and world’s biggest alcoholic drinks group Diageo Plc will report slightly lower annual profits next week. But the company is gearing up for 2006 growth led by price rises and cost cutting, analysts said on Friday.

The British firm, which makes Smirnoff vodka and Baileys’ Irish Cream, will suffer lower profits due to the sale of a stake in US food group General Mills and a weaker dollar, but should hit underlying growth targets.

Last month, the company warned of slower sales growth in the first six months of 2005, with worsening trading in Europe and declining sales of products like Smirnoff Ice in the US.