Friel urges shareholders to be patient

KERRY chief executive Hugh Friel yesterday stressed the need for patience among shareholders waiting for the group’s next major acquisition.

“There are opportunities, but when they become available remains to be seen,” he said.

The market thought 2003 a quiet year on the acquisition front, even though Kerry spent over €200 million on new businesses.

But the group restructured its finances to leave it well-placed for future buys. Kerry placed a $650m (€507m) bond in the US successfully and has negotiated favourable terms that allowed it to slash ongoing interest costs. The group’s net interest charge for 2003 fell by 25% to €37m as it took advantage of attractive low interest rates, particularly in America.

Kerry also dramatically changed the profile of its €700m debt pile during the year. At the end of 2002, all of the company’s debt was repayable within five years. But only 20% now is due within this timeframe.

The company has cut the level of debt due within two years from €420m to €142m and has extended its average debt maturity from two-and-a-half years to nearly eight. No debt is due to mature this year, while over €250m is scheduled for repayment in more than 10 years’ time.

Mr Friel said the company had not issued shares “for quite some time” and added that all of Kerry’s acquisitions since the €240m purchase of Golden Vale in 2001 had been financed by way of debt.

Mr Friel said the group’s track record in making acquisitions was impressive and that all acquisitions had been earnings enhancing.

He signalled the group’s intent to strengthen its presence in the developing Asia-Pacific market. Kerry already has bases in Thailand and Malaysia. Mr Friel said China would be a future area of focus and added that the group would consider buying so-called “brown field” sites - existing manufacturing plants in need of investment.

But he offered no clues on market speculation of a move on convenience food group Greencore.