By Eamon Quinn
Shares in Kerry Group have risen 2.5% after the food firm said it was in good financial shape to continue its worldwide acquisitions drive and to withstand fast-flowing changes in consumer preferences. In an interim management statement, Kerry said that it increased sales volumes and revenues and maintained its profit margins, with pricing having fallen only slightly in the group in the third quarter.
Volumes were up 3.5% in the three months to the end of September, revenues rose 2.2% boosted by recent acquisitions, and margins were maintained despite the firm facing an average fall in prices of 0.2% and currency translation headwinds.
It also said that progress was good in integrating its recent €365m acquisitions of Fleischmann’s Vinegar Company in the US and Oman-based Aatco Food Industries.
Despite the acquisitions, its net debt was unchanged from €1.4bn at the end of 2017, which means “the group’s consolidated balance sheet remains strong which will facilitate the continued organic and acquisitive growth of group businesses”.
“In summary, we are encouraged by the progress we have made in 2018 and reaffirm our full-year 2018 guidance of adjusted earnings growth of 7% to 10% in constant currency,” it said.
Its taste and nutrition division secured good growth it said, with solid growth in developed markets and strong broad-based growth posted in developing markets.
Volumes in the consumer foods division rose 1.2%.
However, growing trading margins were hit by currency translation costs.
“While the UK consumer landscape had been resilient in the first half of 2018, demand softened in a number of categories in the third quarter”, Kerry said, adding that its plans to insulate itself from the worst effects of Brexit were continuing.
However, it repeated that its convenience ‘meal solutions products’ were again “challenged”. Cheestrings and Fridge Raiders performed well, however.
Chief executive Edmond Scanlon said: “We are pleased with our performance to date in 2018, with volume growth well ahead of our markets and underlying margin expansion in line with expectations. In the third quarter, we have delivered good volume growth against very strong comparatives.”
Kerry shares have risen 12.5% in the past year, valuing it at over €16.57bn.