Drinks giant Diageo warns it’s on course to take a £200m hit from the coronavirus fallout amid bar and restaurant closures
FTSE 100 listed group’s share price fell over 4% in early morning trading Annual profits and sales expected to take a hit from virus fallout, group warns
The closure of bars and restaurants across Asia triggered by the coronavirus outbreak looks set to hit drinks group Diageo’s profits to the tune of up to £200million.
The company, which is the world’s biggest spirits maker, said cancelled conferences, postponed events, restaurant and bar closures, and a ‘substantial reduction’ in banqueting, had all started to take their toll on its bottom line.
Diageo expects a hit to its net sales of between £225million and £325million for the year, while operating profits could be between £140million to £200million lower than expected.
Financial hit: Drinks giant Diageo has warned that the coronavirus could hit its annual profits by up to £200million
Outbreak: The coronavirus outbreak is affecting people and businesses around the world
The FTSE 100 index continued to fall deeper into the red this morning and Diageo, which is also listed on the blue-chip index, has seen its share price fall by 4.32 per cent or 130.25p to 2,881.75p.
At present, the FTSE 100 is down 1.45 per cent or 101 points to 6,916.
In a stock market statement, Diageo said: ‘Public health measures across impacted countries in Asia Pacific, principally in China, have resulted in: restrictions on public gatherings, the postponement of events and the closure of many hospitality and retail outlets.
‘Several countries and many businesses have also imposed restrictions on travel.
‘It is difficult to predict the duration and extent of any further spread of the COVID-19 outbreak both in and outside of Asia.’
The drinks group said it had seen ‘significant’ disruption since the end of January, which it expects to last until at least March.