Diageo, the world’s largest spirits company, has signalled a turnaround after two years of flat sales.
The group put its problems down to a range of issues including a downturn in sales in emerging markets.
Organic sales fell 1% but pre-tax profit was up 8% due partly to gains on disposals including the sale of Gleneagles Hotel in Perthshire.
Net sales in the year to June 30 were up slightly at £10.8 billion but pre-tax profit was up to £2.9bn.
The Edinburgh maker of Johnnie Walker whisky, Smirnoff vodka and Guinness said organic net sales growth for the year to June 30 had been flat.
It was the second year in a row of stagnation, despite analysts expecting growth of 0.2%.
A financial highlight of Diageo’s year was an “exceptional gain” a profit of £73 million from the sale of Gleneagles Hotel to the Ennismore Group for a price understood to be in the region of £200m.
The distiller’s presence in Tayside and Fife is also represented by its plant at Leven which employs more than 900 people to bottle and package more than 37m cases of spirits annually.
Earnings per share before one-time items fell to 88.8 pence from 95.5p, below analysts’ average estimate for the period of 90.3p.
Sales were hurt by a government crackdown on gift-giving in China and slowing economies in other emerging markets where Diageo recently made acquisitions.
Aggressive discounting on vodka in the United States and a relatively small exposure to the popular American whiskey sector were other difficulties.
Diageo insisted efforts to shift the focus of business away from what it sells to wholesalers to what they in turn sell to retailers would bring an improvement.
Chief executive Ivan Menezes said the group’s size and global spread put it in an enviable position.
He continued: “This year we made further changes to build strong, sustained performance including embedding our sell-out discipline, improving cash conversion and strengthening our route to consumer.
“Our brands, our global footprint and our people give me confidence that Diageo can deliver strong and sustained performance,” he added.