Drinkers have toasted the return of the leisure and travel sector by sending Diageo’s revenues soaring. The group’s premium spirits have grown despite economic woes, giving a boost to margins.

The global spirits giant posted a 21.4% surge in full-year net sales to £15.5bn in the year to 30 June, driven by organic volume growth of 10.3% and 11.1 percentage points of price hikes.

As well as passing on inflation, pricing growth was driven by booming sales of its super-premium brands – particularly scotch, tequila and Chinese white spirits, which boosted price/mix. The pricing gains were also reflective of the recovery of the on-trade, particularly in North America and Europe, and travel retail’s partial recovery.

Diageo said all regions delivered double-digit growth amid the reopening of the on-trade and “resilient” consumer demand in the off-trade, as well as market share gains. It said it benefited from the wider trend of spirits taking share of total alcoholic beverage market, leading to tequila growth surging to 55% group-wide, while scotch was up 29%.

Reported operating profit increased 18.2% and organic operating profit grew more than 26.3%, but was held back by impairments related to the winding down of its Russian business and disposal of brands in India. Organic operating margin increased 121bps despite cost input hikes and a uptick in marketing investment.

The only blot on the booming growth was cautious comments from CEO Ivan Menezes, who was cautious about Diageo’s new financial year, which would be “challenging” amid “ongoing volatility, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty”.

Barclays hailed the “very strong” top and bottom line beats despite the lack of “specificity or exuberance” in the guidance. It noted: “We continue to believe Diageo to be a ‘best in class’ company in the beverages space and would buy any weakness that may result from this volatility.”

Diageo shares were up 2.1% on the news to 3,845 and remain up 9.5% year on year, despite the wider stock market downturn.

Elsewhere, AB InBev also delivered double-digit top line growth in the second quarter as out-of-home drinking roared back.

Revenue rose by 11.3% in its second quarter, driven by per hl growth of 7.5%, and by 11.5% in first half with revenue per hl growth of 7.9%.

Growth was boosted by ongoing premiumisation and expansion of the beer category across most key markets, supported by increased investment in its brands.

It saw a 9.7% increase in combined revenues of its global brands, Budweiser, Stella Artois and Corona, outside of their respective home markets in the second quarter and 7.9% in first half.

The group’s normalised EBITDA of $5.1bn represented an increase of 7.2% with margin contraction of 127 bps to 34.5% due to commodity and supply chain cost headwinds.

Bernstein noted: “Underlying trends remain solid and an unchanged outlook is positive”.

AB InBev shares slipped 5% back to €51.60 on Thursday morning on the a lack of clarity on guidance and weaker earnings figures.

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