REG - Diageo Capital plc - Half-year Financial Report
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RNS Number : 6804Y Diageo Capital plc 30 March 2026
Diageo Capital
plc
LEI: 213800L23DJLALFC4O95
Half-year results for the six months ended 31 December 2025
The Directors present their interim financial report for the six months ended
31 December 2025.
Activities
Diageo Capital plc (the "company") is engaged in the provision of treasury,
risk and cash management for Diageo plc and its subsidiary undertakings (the
"group"). Diageo Capital plc's principal activity is to raise external funds,
principally using the London and New York financial markets. The company
finances other companies of the group via intragroup loans and deposits.
Foreign exchange translation hedging, interest rate risk management and cash
management are also performed by the company.
The company does not anticipate any changes in its activities in the remaining
six months of the financial year.
Business review
Development and performance of the business of the company during the period
and position of the company as at 31 December 2025
The results of the company and the development of its business are influenced
to a considerable extent by group financing requirements. Further information
on the risk management policies of the group is included in the Annual Report
2025 of Diageo plc (see note 16 of the consolidated financial statements of
Diageo plc).
Net finance income was $45 million in the six months ended 31 December 2025,
which is a $36 million decrease from net finance income of $81 million in the
six months ended 31 December 2024.
External borrowings decreased by $1,220 million in the six months ended
31 December 2025 to $7,364 million from $8,584 million in the year ended
30 June 2025, mainly due to the repayment of two bonds during the period.
Financial and other key performance indicators
As the company forms part of the group's treasury operations, the company's
performance is measured at the group level.
$49 million profit was transferred to reserves in the six month ended
31 December 2025, (six months ended 31 December 2024 - $85 million) and the
other comprehensive loss is $3 million (six months ended 31 December 2024 -
$2 million loss).
The Directors do not propose the payment of an interim dividend to be
distributed to shareholders in regard to the six months ended 31 December
2025 (six months ended 31 December 2024 - $nil).
Going concern
The company's business activities, together with the factors likely to affect
its future development and position, are set out below. The company is
expected to continue to generate profit for its own account and to remain in a
positive net asset position for the foreseeable future. The company
participates in the group's centralised treasury arrangements and the parent
has committed to provide financial support for at least 12 months from
signing. The directors have no reason to believe that a material uncertainty
exists that may cast significant doubt about the ability of the company to
continue as a going concern. On the basis of their assessment, the company's
directors have a reasonable expectation that the company will be able to
continue in operational existence for a period of at least 12 months from the
date the financial statements are approved and signed, as Diageo plc has
agreed its policy to provide financial support for a period of at least 12
months from the date the financial statements are approved
Going concern (continued)
and signed. Thus they continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
In arriving at this conclusion, the directors have also considered the
potential impact that the principal risks outlined below may have on the
company and believe that any impact would be minimal.
Principal risks and uncertainties facing the company as at 31 December 2025
The principal risks identified by the group are disclosed on pages 63 to 71 of
Diageo plc's 2025 Annual Report. The most relevant of the group risks to this
entity are the ones we have selected and articulated below, together with
specific considerations relating to the company's operations and environment.
If any of these risks occur, the company's business, financial condition and
operational results could be impacted. As the company forms part of the
group's investment holding and financing structure, the financial risk
management measures used by management to analyse the development, performance
and position of the company's business are mainly similar to those facing the
group as a whole. The directors consider that the following risks might impact
the performance and the solvency or liquidity of the company through its
investments and /or intercompany financing structure.
Geopolitical and macroeconomic volatility
Geopolitical forces, driven by external events (such as war, public health
threat or natural hazard), coupled with macro-economic volatility, increase
the likelihood of international and domestic tensions, disputes and conflict
that might impact the business. Macroeconomic conditions include inflationary
pressures, unemployment and global trade tensions. Financial volatility risk
could arise from variability in financial markets, interest rate fluctuations,
currency instability and increased risks from tariffs and counter-tariffs.
Failure to react quickly enough to changing economic and/or political
conditions, e.g. inflationary pressures, currency instability, global trade
tensions, heightened political protectionism, changes to customs duties and
tariffs, and/or eroded consumer confidence, may impact on the freedom to
operate in a market and could adversely impact financial performance.
The group monitors key business drivers and performance, to prepare for rapid
changes in the external environment and there is an enhanced group-level
strategic analysis and scenario planning to strengthen market strategies and
risk management.
The group has continued to improve long-term forecasting and planning
capabilities, to better assess and respond to long-term opportunities and
risks. The group has also continued to operate the strategic planning and
performance function with a stronger governance model for financial and
non-financial decision-making. This will enable closer monitoring of external
volatility/risk and multi-country investment strategy with central hedging and
currency monitoring to manage volatility
Principal and financial risks and uncertainties facing the company as at
31 December 2025 (continued)
Cyber and IT resilience
As technology evolves rapidly, maintaining robust cyber security measures is
essential to safeguard the
business operations and stakeholders. There is an increased risk from
AI-enabled cyber-attacks, which could result in theft of assets, operational
disruption, financial loss, regulatory penalties and reputational damage.
A generative AI-chatbot is used for real-time learning, revised ransomware
response protocols and improved phishing simulation outcomes, while deploying
Privileged Identity Management to enhance cloud security and deliver regular
mandatory, general, and targeted cybersecurity training and education. Cyber
resiliency efforts include assessing IT recovery processes, third-party
assessment, increasing vulnerability scanning frequency, patch compliance
monitoring, alert management enhancements. Initiatives are underway for
application governance enhancements and multi-factor authentication
improvements to bolster cyber security measures across the business.
Climate change and sustainability
Considering that the company forms part of the group's treasury operations,
the probability of climate change related risks having a significant and
direct impact on the activities and operation of the company is remote. The
Directors believe that the risk mitigation actions taken in relation to
climate risk by the group are appropriate measures in managing direct or
indirect risks posed by climate change. Including the risk to the company of
being able to access financing at competitive rates where borrowings could
become sustainability linked. Based on the climate risk assessment performed
by the group, the risk attached to the recoverability of intercompany balances
is considered to be remote.
Further information on the group's risk assessment and risk management
measures in relation to climate change is disclosed on pages 46-62 and 65 of
Diageo plc's 2025 Annual Report.
Over time the group will continue to refine and update it's Climate Change
Risk Assessment to reflect real time developments resulting from climate
change.
Business transformation
There are a number of group strategic business transformation projects, namely
the implementation of Accelerate, SAP S/4 HANA, and Supply Chain Agility
programme and our portfolio of digital capability builds that could result in
delays or changes to their expected benefits which may have an adverse impact
on the business processes or on the group's operating and financial
performance.
To mitigate the risk, the business transformation project has steering groups
in place led by a senior executive and regular progress updates are provided
to the Executive Committee and Board.
The group has hired additional employees fully dedicated to the projects and
external consultants and partners who also bring in new skills, which includes
a focus on process improvement, business resilience and controls.
Statement on Section 172 of the Companies Act 2006
Section 172(1) of the Companies Act 2006 requires the directors to promote the
success of the company for the benefit of the members as a whole, having
regard to the interests of stakeholders in their decision-making. In making
decisions, the directors consider what is most likely to promote the success
of the company for its shareholders in the long term, as well as the interests
of the group's stakeholders.
Principal and financial risks and uncertainties facing the company as at
31 December 2025 (continued)
The directors understand the importance of taking into account the views of
stakeholders and the impact of the company's activities on local communities,
the environment, including climate change, and the group's reputation.
The company is a member of the group of companies (the "group") whose ultimate
holding company is Diageo plc ("Diageo"). In accordance with the requirements
of UK company law, Diageo has included in its 2025 Annual Report and Accounts
on page 2 a statement as to how the directors of Diageo have had regard to the
matters set out in Section 172(1) of the Companies Act 2006.
In order to ensure consistency in how the group operates with regard to its
wider stakeholders, the group has adopted an internal Code of Business Conduct
alongside a comprehensive framework of global policies and standards that are
designed to ensure, amongst other things, that all companies throughout the
group, including the company, have regard to its wider stakeholders in a
consistent manner.
The company has therefore had regard to the matters set out in Section 172(1)
of the Act in a manner that is consistent with the approach adopted by Diageo,
while at the same time ensuring the directors of the company are fulfilling
their duties.
Main activities of the Board
The principal activities of the Board during the year include:
• approval of financial statements for the year ended 30 June 2025;
• approval of the appointment of its external auditor; and
• approval of the entry into facility agreements by the company.
Business Relationship Statement
The business of the Company is that of a treasury and capital management
company and as such it has a more limited number of third-party business
relationships than other companies within the Group. However, in order to
ensure consistency in how the Group operates, the Company has adopted an
internal Code of Business Conduct alongside a comprehensive framework of
global policies and standards that are designed to ensure, amongst other
things, that all companies throughout the Group, including the Company, have
regard to its wider stakeholders, including those in a business relationship
with the Company, in a consistent manner. Decisions taken by Directors are
informed by the interests of its wider stakeholders, including those in a
business relationship with the Company, as guided by, amongst other things,
the Code of Business Conduct and framework of policies and standards.
On behalf of the Board
Kara Elizabeth Major
Director
11 Lochside Place
Edinburgh
Scotland
EH12 9HA
30 March 2026
Independent review
This interim report has not been audited or reviewed by auditors.
Statement of Directors' responsibilities
The Directors confirm that this condensed set of interim financial information
has been prepared in accordance with Financial Reporting Standard 104: Interim
Financial Reporting, issued by the Financial Reporting Council, and that the
interim management report includes a fair review of the information required
by DTR 4.2.7R and DTR 4.2.8R namely:
• an indication of important events that have occurred during the
first six months of the financial year and their impact on the condensed set
of financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year, and
• material related party transactions in the first six months of the
financial year and any material changes in the related party transactions
described in the last annual report.
The Directors of the company are listed in the company's annual report and
financial statements for the year ended 30 June 2025.
Kara Elizabeth Major
Director
30 March 2026
INCOME STATEMENT (UNAUDITED)
Six months ended Six months ended
31 December 2025 31 December 2024
Notes $ million $ million
Other operating income 4 4
Finance income 1 284 364
Finance charges 1 (239) (283)
Operating profit 49 85
Profit before taxation on ordinary activities 49 85
Profit for the period 49 85
STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Six months ended Six months ended
31 December 2025 31 December 2024
Notes $ million $ million
Other comprehensive income
Items that may be recycled subsequently to the income statement
Effective portion of changes in fair value of cash flow hedges
-recycled to income statement (4) (3)
Tax charge on effective portion of changes in fair value of cash flow hedge 2 1 1
Other comprehensive loss (3) (2)
Profit for the period 49 85
Total comprehensive income for the period 46 83
BALANCE SHEET (UNAUDITED)
31 December 2025 30 June
2025
Notes $ million $ million
Non-current assets
Other receivables 5 9,390 10,158
Other financial assets 4 4 1
9,394 10,159
Current assets
Trade and other receivables 5 5 6
5 6
Total assets 9,399 10,165
Current liabilities
Trade and other payables 6 (1,162) (729)
Other financial liabilities 4 - (8)
Borrowings 3 (799) (1,250)
(1,961) (1,987)
Non-current liabilities
Borrowings 3 (6,565) (7,334)
Other financial liabilities 4 (153) (169)
Deferred tax liability 2 (36) (37)
(6,754) (7,540)
Total liabilities (8,715) (9,527)
Net assets 684 638
Equity
Share premium 315 315
Fair value and hedging reserves 107 110
Other reserves 88 88
Retained surplus 174 125
Total equity 684 638
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY
Subtotal Retained
Share Hedging Other Other surplus/
premium reserve reserves reserves (deficit) Total
$ million $ million $ million $ million $ million $ million
Balance at 30 June 2024 315 108 88 196 (3) 508
Other comprehensive income for the period - 2 - 2 - 2
Profit for the period - - - - 128 128
Balance at 30 June 2025 315 110 88 198 125 638
Other comprehensive loss for the period - (3) - (3) - (3)
Profit for the period - - - - 49 49
Balance at 31 December 2025 315 107 88 195 174 684
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
ACCOUNTING POLICIES
The company is incorporated and domiciled as a public limited company in the
United Kingdom.
The interim financial statements of the company for the six months ended
31 December 2025 were authorised for issue in accordance with a resolution of
the Directors on 30 March 2026.
Basis of preparation
The annual report and financial statements of the company for the year ended
30 June 2025 were prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101) and Companies Act 2006.
The interim condensed financial statements for the six months ended
31 December 2025 have been prepared in accordance with Financial Reporting
Standard 104 Interim Financial Reporting (FRS 104), issued by the Financial
Reporting Council. The interim condensed financial statements do not include
all of the information and disclosures required in the annual financial
statements, and should be read in conjunction with the company's annual
financial statements at 30 June 2025.
The accounting policies adopted in the preparation of the interim financial
statements are consistent with those followed in the preparation of the
company's annual report and financial statements for the year ended 30 June
2025.
These condensed interim financial statements have not been subject to a full
audit or audit review and do not constitute statutory financial statements as
defined in section 434 of the Companies Act 2006. The annual report and
financial statements for the year ended 30 June 2025 were approved by the
Directors of the company on 22 October 2025 and have been filed with the
Registrar of Companies. The report of the auditors on those financial
statements was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under section 498 of the Companies Act 2006.
The company is a wholly owned subsidiary of Diageo plc and is included in the
consolidated financial statements of Diageo plc which are publicly available.
These financial statements are separate financial statements.
Functional and presentational currency
These financial statements are presented in US dollar ($), which is the
company's functional currency.
All financial information presented in US dollar has been rounded to the
nearest million unless otherwise stated.
Going concern
The financial statements have been prepared on a going concern basis as the
ultimate parent undertaking has agreed its policy is to provide financial
support for a period of at least 12 months from the date the financial
statements are approved and signed.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (continued)
1. FINANCE INCOME AND CHARGES
Six months ended Six months ended
31 December 2025 31 December 2024
$ million $ million
Finance income from fellow group undertakings 249 319
Amortisation of fair value changes 4 4
Fair value gain on intra-group derivative financial instruments 31 41
Total finance income 284 364
Finance charge to fellow group undertakings (39) (54)
Finance charge on all other borrowings (166) (184)
Fair value loss on intra-group derivative financial instruments (3) -
Fair value adjustment on borrowings (27) (41)
Discount and fee amortisation (4) (4)
Total finance charges (239) (283)
Net finance income 45 81
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (continued)
2. TAXATION
The total tax credit for the six months ended 31 December 2025 was $1 million
charge (31 December 2024 - $1 million charge), in accordance with the
deferred tax liability in relation to the effective portion of changes in fair
value of cash flow hedges. The change in deferred tax liability is presented
as part of the other comprehensive income.
3. BORROWINGS
31 December 2025 30 June
2025
$ million $ million
US$ 500 million 5.2% bonds due 2025 - 500
US$ 750 million 1.375% bonds due 2025 - 750
US$ 800 million 5.375% bonds due 2026 799 -
Borrowings due within one year 799 1,250
US$ 800 million 5.375% bonds due 2026 - 799
US$ 750 million 5.3% bonds due 2027 749 749
US$ 500 million 3.875% bonds due 2028 499 498
US$ 1,000 million 2.375% bonds due 2029 995 993
US$ 1,000 million 2% bonds due 2030 996 995
US$ 750 million 2.125% bonds due 2032 745 745
US$ 750 million 5.5% bonds due 2033 745 745
US$ 900 million 5.625% bonds due 2033 895 895
US$ 600 million 5.875% bonds due 2036 595 595
US$ 500 million 3.875% bonds due 2043 492 492
Fair value adjustment to borrowings (146) (172)
Borrowings due after one year 6,565 7,334
Total external borrowings 7,364 8,584
The interest rates of external borrowings shown in the table above are those
contracted on the underlying borrowings before taking into account any
interest rate hedges. Bonds are stated net of unamortised finance costs of
$40 millions (30 June 2025 - $43 millions).
Bonds are reported at amortised cost with a fair value adjustment shown
separately. These fair value adjustments are determined using discounted cash
flow method based on observable market input (Level 2). All bonds, medium-term
notes and commercial paper issued by the company are fully and unconditionally
guaranteed by Diageo plc.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (continued)
4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Fair value measurements of financial instruments are presented through the use
of a three-level fair value hierarchy that prioritises the valuation
techniques used in fair value calculations.
The group maintains policies and procedures to value instruments using the
most relevant data available. If multiple inputs that fall into different
levels of the hierarchy are used in the valuation of an instrument, the
instrument is categorised on the basis of the most subjective input.
Interest rate swaps are valued using discounted cash flow techniques. These
techniques incorporate inputs at levels 1 and 2, such as foreign exchange
rates and interest rates. These market inputs are used in the discounted cash
flow calculation incorporating the instrument's term, notional amount and
discount rate, and taking credit risk into account. As significant inputs to
the valuation are observable in active markets, these instruments are
categorised as level 2 in the hierarchy. There were no significant changes in
the measurement and valuation techniques, or significant transfers between the
levels of the financial assets and liabilities in the period ended
31 December 2025.
The company's financial assets and liabilities measured at fair value are
categorised as follows:
31 December 2025 30 June 2025
$ million $ million
Derivative assets 4 1
Derivative liabilities (153) (177)
Valuation techniques based on observable market input (149) (176)
(Level 2)
5. TRADE AND OTHER RECEIVABLES
31 December 2025 30 June 2025
Due within one Due after one Due within one Due after one
year year year year
$ million $ million $ million $ million
Amounts owed by fellow group
undertakings 4 9,390 5 10,158
Prepayments 1 - 1 -
5 9,390 6 10,158
Amounts owed by fellow group undertakings represent transactions with
companies in the group with which the company has a long-term financing
relationship. These financing relationships are expected to continue for the
foreseeable future. Certain amounts owed by fellow group undertakings are
repayable on demand, but reclassified to non-current assets as they are not
expected to be repaid in the foreseeable future. Amounts owed by group
undertakings are considered to have a fair value which is not materially
different to the book value. Expected credit loss is immaterial for amounts
owed by fellow group undertakings.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (continued)
6. TRADE AND OTHER PAYABLES
31 December 2024 30 June 2025
$ million $ million
Amounts owed to fellow group undertakings 1,089 650
Interest payable 73 79
1,162 729
Amounts owed to fellow group undertakings represent transactions with
companies in the group with which the company has a long-term financing
relationship. These financing relationships are expected to continue for the
foreseeable future. Amounts owed to group undertakings are considered to have
a fair value which is not materially different to the book value.
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