Kerry sales up 4.6% as profits hit €224m

FOOD and ingredients group Kerry delivered results in line with expectations yesterday, recording pre-tax profits of €224 million.

Sales grew by 4.6% on a like-for-like basis, falling just short of €3.7 billion, but the former co-op's revenues from America and Britain suffered from a stronger euro.

Kerry chief executive Hugh Friel said the group was "extremely confident" about the outlook and that the group had achieved an "excellent operational and financial performance" in a year that saw significant currency shifts.

Operating profit was €308.5m, a 7.6% increase on a like-for-like basis, excluding currency effects and goodwill. Kerry said it became more efficient during the year and replaced lower-margin items with more innovative products. This increased efficiency resulted in better operating margins, which improved by 0.3% to 8.4%.

The group spent €208m on acquisitions last year, which included Da Vinci Gourmet and Crystals International, two high-profile flavours businesses in the US that accounted for $62m (€48m). Capital expenditure on plant and machinery remained broadly constant at €92.8m, while spending on research and development grew by 12.6% to €88.4m.

Turnover increased in all markets in local currency terms. Sales grew by 3% in Ireland, 5% in the rest of Europe, 6% in the Americas and 12% in the Asia Pacific region. Operating profits were up 11% in Ireland; 8% in the rest of Europe; 6% in the Americas, and 12% in Asia and the Pacific.

Chief financial officer Brian Mehigan said Kerry had coped with a 40% fall in the value of the dollar over the last two years.

The group's Irish operations accounted for €1.3bn in sales, or 36% of the total. 34% of sales came from the rest of Europe, while a further 25% was generated from American plants.

A number of boardroom changes were also announced yesterday. Michael Griffin will step down as executive director and chief executive of the group's consumer foods division. Flor Griffin, the current general manager of Kerry Foods Ireland, will replace Mr Griffin. The group also announced the appointment of former US Ambassador to Ireland, Mike Sullivan, as a non-executive director.