Diageo’s once high-flying share price was already back at 2012 levels. Now the dividend is there too. Sir Dave Lewis has cut it in half, chopping as drastically as the market feared he would.
But that doesn’t quite explain Wednesday’s 13% fall in the shares. Rather, that was down to two factors. First, the trading numbers continued the miserable run for the entire spirits sector – Diageo edged down its full-year forecasts again. The company is getting little help from the market, especially in the US and China. Second, and more importantly, Drastic Dave was vague about what shareholders can expect in terms of hard returns once he has administered his turnaround tonic.
