Kerry set to make €166m as profits rise

KERRY Group is on course to make net profits this year of €166m after reporting a 10% increase in post-tax profits for the first six months of the year.

With like-for-like sales growing by 5.9%, the value of sales remained almost static at €1.8bn as the weakness of the US dollar and sterling diminished the value in euro terms of repatriated profits.

Kerry Group, which has global operations specialising in ingredients, flavourings and consumer foods, said it had kept its turnover on track despite a significant shift in the US dollar and sterling exchange rates against the euro.

Kerry Group managing director Hugh Friel said: “Against a background of significant currency movement in the group’s major markets, Kerry outperformed industry growth rates delivering a strong operational performance and good financial results.

“Like-for-like sales increased by 5.9% relative to the first half of 2002 and the group operating margin advanced by 30 basis points. Awareness of health and dietary issues is providing a positive stimulus for innovation across our ingredients, flavours and consumer foods business units.”

Mr Friel said he is confident of a good out-turn for the full-year, in line with market forecasts with brokers forecasting net profits in the region of €166m.

Kerry Group, effectively controlled by dairy farmers in Kerry, Cork and Limerick, posted an operating profit of €113m before goodwill and exceptional items in the six months to end-June, with adjusted earnings per share up 10.3% to 46.1c. After-tax profit rose 10.6% to €85.6m, adjusted for the one-time €25.5m cost of integrating Golden Vale Plc in the same period of 2002.

The company, which spent more than €120m on acquisitions in the first half of the year, said it would remain focused on small to medium-sized bolt-on targets in order to expand its core business base in all territories.

The group announced an 11% rise in its interim dividend to 4.05c.

Finance director Brian Mehigan said: “We would hope we can deliver 9.8% earnings-per-share growth this year, which is in line with market forecasts.”

The company also divulged that stage 1 of a €14m capital investment programme to quadruple production capacity across the Cheestrings range has commenced at the company’s Charleville production plant.

Kerry Group closed down 10 cents yesterday, a fall of 0.68%.