Kerry Group sells poultry processing plants

IRELAND’S largest food company, Kerry Group, has sold its primary poultry processing operations in Britain and Ireland in a drive to improve margins.

The Tralee-based group confirmed yesterday it sold the units at the end of December. No price has been disclosed. Head of corporate affairs Frank Hayes said this was at the purchaser’s request.

The group has sold its Grove Farm operations in Monaghan to its three key executives, Tom O’Driscoll, Stephen O’Halloran and Brendan McGuire, all long-term group employees.

In Britain it has emerged the group’s Redgrove plant has been bought by Grissingham Foods. The Redgrove operation is based in Norfolk and involved mainly in the production of ducks.

The disposals are part of a plan announced on September 5, 2006, when Kerry said it intended to sell or close 11 manufacturing sites. Mr Hayes said the plan, when fully delivered would add 0.25 basis points to the group’s overall margin. In 2005 that was 8.6, unchanged from the previous year.

In May 2006 the group issued a profit warning saying Earnings Per Share would be flat for the year.

Analysts expect the EPS figure to be in line with the 2005 figure of 132 cent. They are forecasting modest improvement to 138 cent for the current year.

Recently NCB Stockbrokers warned the group needed to tackle the underlying EPS figure to avoid “a permanent derating” of its shares, in keeping with single digit EPS growth.