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DIAGEO Update on trading and capital return programme Released : 12 May 2021 07:00 RNS Number : 3481Y Diageo PLC 12 May 2021 12 May 2021 This release contains inside information Diageo provides trading update and recommences its return of capital programme Diageo plc ( Diageo ) today announces that it expects organic operating profit growth to be at least 14 % in fiscal 21 , slightly ahead of organic net sales growth . In the context of this strong performance , Diageo is recommencing its return of capital ( ROC ) programme of up to £ 4.5 billion to shareholders announced on 25 July 2019. Due to the impact of Covid - 19 , the original completion date for the ROC programme has been extended by two years to 30 June 2024 . Current trading update Following a strong performance in the first half of fiscal 21 , with a return to organic net sales growth , our business has continued to deliver a good recovery across all regions . In North America , our largest market , our performance has remained particularly strong , reflecting resilient consumer demand , the breadth of our portfolio and the effectiveness of our marketing and innovation . In Europe , we are benefitting from strong execution in the off - trade channel and the partial re - opening of the on - trade channel in certain markets . In Africa , Asia Pacific and Latin America and the Caribbean , we are seeing a continued recovery in most markets , despite the ongoing impact from Covid - 19 . Travel retail remains severely impacted . Return of capital programme On 25 July 2019 , the Board of Diageo approved the return of up to £ 4.5 billion to shareholders in the three - year period from 1 July 2019 to 30 June 2022 , utilising the most appropriate mechanic of either share buybacks or special dividends depending on market conditions . Under the first phase of the ROC programme , which ended on 31 January 2020 , Diageo repurchased shares to a value of £ 1.25 billion . On 9 April 2020 , Diageo announced that it had not initiated the next phase of the ROC programme . Diageo is announcing today that it is initiating the second phase of its ROC programme of up to £ 1.0 billion to be completed by the end of fiscal 22. Diageo has entered into a non - discretionary agreement with UBS AG London Branch ( UBS ) to enable the company to buy back shares . This agreement will commence on 12 May 2021 and is expected to end no later than 12 November 2021 and will be for a value of up to £ 0.5 billion . All shares repurchased will be cancelled . Further execution phases of the ROC programme will be announced in due course . Ivan Menezes , Chief Executive , said : " I am very pleased with how our business is recovering in fiscal 21 , our strong competitive performance across key markets and our robust cash generation . Our disciplined approach to capital allocation is unchanged . Our priority remains to invest in the business to deliver sustainable and efficient organic growth and to pursue acquisitions that further strengthen our exposure to attractive categories . When we have excess cash , we have been clear that we will seek to return it to shareholders . The Board's decision to resume our return of capital programme at this time reflects Diageo's improved performance in the first half of fiscal 21 , the continued strong recovery of our business , and our expectation that we will be back within the top end of our target leverage ratio [ 1 ] of 2.5-3.0x at 30 June 2022 , post completion of the second phase of the return of capital programme . We are confident that Diageo will continue to execute effectively in this challenging environment and will emerge stronger . " Further details of the return of capital programme UBS will make its trading decisions in relation to the company's securities independently of , and uninfluenced by , the company . Any repurchase of shares by Diageo contemplated by this announcement will be carried out on the London Stock Exchange and / or other recognised investment exchange ( s ) . The buybacks will be effected within certain pre - set parameters and in accordance with Diageo's general authority to repurchase shares , and will be conducted within the parameters prescribed by the Market Abuse Regulation 596/2014 , the Commission Delegated Regulation ( EU ) 2016/1052 ( both as incorporated into UK domestic law by the European Union ( Withdrawal ) Act 2018 ) and , in the case of Diageo , Chapter 12 of the Listing Rules .