Kerry earnings set to grow by 10%

GLOBAL food giant Kerry Group Plc expects earnings per share to grow by 10% this year, chief executive Stan McCarthy yesterday told the group’s annual general meeting in Tralee.

He said it was confident of delivering earnings growth, in 2010, to a range of 182 to 185 cents per share. For 2009, the group reported earnings per share of 166.5 cent, up 8.2% from the previous year

There had been strong organic growth in the first quarter of this year, with a 5.9% sales rise, an upbeat Mr McCarthy said.

“This is extremely encouraging because, over the long haul, volume growth is what you need,” he stressed.

He told shareholders the group’s consumer foods had performed well in Britian market, last year, but had underperformed in Ireland in the face of competition from supermarket own-brand products and spending cuts by consumers.

“We also had a deflationary environment, which meant reduced prices, and consumer spending habits became more frugal. There was less spending overall on food and beverages,” he added.

Kerry’s main British brands include Wall’s sausages and Cheestrings snacks, but around two-thirds of its business is in selling ingredients and flavours across 140 countries.

Mr McCarthy told shareholders the group, which last year had a 9.3% profit on sales of €4.5 billion, would continue to expand into new markets.

“There are parts of the world not yet penetrated by our business and we will follow the growth of the middle class around the globe,” he said.

The group would also focus on healthy foods in response to consumer demands which, he believed, were not going to change.

While stressing the primary importance of organic growth, Mr McCarthy told reporters afterwards there had been no significant acquisitions by the group, as yet, this year, but he did not rule out acquisitions. He also saw further possibilities for expansion in Asia, China, Africa and India.

Europe accounts for 63% of total sales, the Americas 28% and Asia/Pacific 9%.

Asked why the group’s share price – currently at around €23.45 – was holding so steady in spite of the recession, he replied the group had a reputation for delivering consistently and for reliability and was not a high-risk organisation.