Drinks giant Diageo has said annual sales grew by six per cent after it benefited from strong demand for its Johnnie Walker and Smirnoff brands.
The group, which is the world's biggest alcoholic drinks maker, said the improvement for the year to the end of June came despite tougher licensing regulations in its European markets.
Its priority brands, which also include Guinness, Captain Morgan rum and Jose Cuervo tequila, continued to grow strongly in the United States and are outperforming the market, it added.
London-based Diageo said its wine brands were also performing well in an increasingly competitive market.
But the overall growth of its beer brands had been hit by the weakness of the Irish beer market.
Paul Walsh, Diageo's chief executive, said: "As the year closes we have successfully delivered on our objectives. We are building a superior position in North America, investing strongly behind our brands in International and continuing to reduce costs in Europe."
I n February, Diageo reported a seven per cent rise in operating profits to £1.26 billion in the six months to New Year's Eve.
In the European market, Diageo said that the improved performance of Guinness in the UK and J&B in France had been offset by the decline in the Scotch whisky market in Spain and the disruption caused by the introduction of new excise duty stamps in Russia.
In the US, the drinks maker said it continued to benefit from the move towards premium brands across all of its alcohol ranges.
Analysts said they were unlikely to change their fore-casts for Diageo's underlying earnings per share at 50.6-52p for the year to June 2006, while t hey expect 56-69p for 2006/2007.
The group said its expects exchange rates will hit its results by £30 million in the current year and also by the same amount in its 2006/2007 financial year.
Diageo shares have outperformed European markets and its peers over the last month reflecting its defensive attractions as world stock markets have fallen since early May.
Diageo shares trade on 15.8 times prospective 2007 earn-ings ahead of arch rival Pernod Ricard on 15.4 times and the Dow Jones European food and beverage sector index on 15.7 times, according to Reuters.
An analyst at JP Morgan Simon Hales said Diageo's underlying growth is outpacing Pernod's for the first time in four years with sales and profits growth at six and seven per cent compared to his forecast for Pernod of 2.8 per cent and 4.8 per cent.
But the City took a tough line following the results announcement as after a recent run up investors were dismayed the company had not raised its expectations for profits growth.
"Yes, top-line sales are growing strongly, but this is being achieved only by spend-ing more and more on marketing," said one analyst.
Diageo expects to publish its full-year results on August 31.