IAWS sees pre-tax profits rise by 13.5%

STRONG growth in the lifestyle food operations in the first half of 2007 will continue to drive the business of IAWS in the second half, the company has said.

IAWS has also disclosed it may float its original core businesses including farm inputs, ambient foods and its land banks in Dublin and Cork.

Commenting on the outlook for the full year, chief executive Owen Killian ruled out a further major acquisition in the short term having paid out €463 million to buy Otis Spunkmeyer in November.

Keeping Spunkmeyer on track to keep the momentum in the business going, was a big priority for the group for this year, he said.

Trading across all markets for the group was difficult according to Mr Killian, who said the nature of the business which delivers to 150,000 outlets on a daily basis with the cost and quality pressures involved, was an ongoing daily challenge for the group.

But the group has sufficient experience to take advantage of the opportunities in the markets in which it operates, he said.

IAWS yesterday reported profits before tax rose 13.5% or 56m for the six months to January 31, 2007.

Sales rose 17% at €838.5m, with operating profits ahead by almost 25% to €57.3m. Adjusted earnings per share were 12% higher at 37.15 cent while the interim dividend has been boosted by 12%.

Sales in the company’s food division were up 27.4% to €463.5m, with sales in the North American part of the business more than doubling to €145.7m, helped by a three-month contribution from bakery company Otis Spunkmeyer, acquired in November. Operating profits in the US were ahead by 108% over the period.

In its core European markets of Ireland, Britain and France the group boosted turnover by 6.2% to €317m and operating profits rose 9.8% to €30.9m.

Over the half-year the group also benefited from an improved margin that was up 0.4% to 8.4% from 8%.

On the down side the accounts showed the impact of the €463m purchase of Otis Spunkmeyer and finance costs rose 92% reflecting higher interest charges and higher debt which shot up from €217m to €689m.