Broker snap: Diageo's new CEO needs to focus on growth, says Investec

7th May 2013 11:33

Diageo has appointed Ivan Menezes as Chief Executive Officer to replace Paul Walsh, the brewing company announced Tuesday.Menezes, who has been Chief Operating Officer since last May, will step into the role on July 1st.Investec analyst Martin Deboo said it was a well-flagged change that was unlikely to have much impact on the share price."For us, Menezes' immediate priority will be to deliver on Diageo's organic growth agenda, which has looked a bit less sprightly recently," he said."Beyond that, we think he needs to think about how best to evolve the strategy and portfolio, around which we continue to question the valuation creation from the integration of spirits and brewing." Investec expects revenue in 2013 to rise to £11.4bn this year, compared to £10bn in 2012 and pre-tax profit to increase to £3.3bn from £3.0bn. The broker retained its 'hold' rating and 1,970p target price. Diageo's shares remained unchanged ta 1,974p at 11:46 Tuesday.RD