Multi-billion euro takeover a Kerry goal

KERRY Group boss Stan McCarthy said yesterday a “multi-billion” euro takeover to enhance the group’s global reach in food ingredients/ flavours was a definite goal for the company.

Commenting after the group reported pre-tax profits of €162.3m for the first six months of 2010, ahead of forecasts, he stressed he was not under any pressure to make such a move in the short term.

“We don’t have to jump the gun. I’m more interested in performance than rushing a big deal,” he said.

At some stage a major multi-billion deal will present itself and “I know we will be capable of doing it, it’s just a matter of when”.

Kerry has also raised its earnings forecast to the “mid-teens” for the year.

Strong growth in the Asia-Pacific region were a key factor in the results which saw sales rise 6.7% to €2.4bn over the period.

Trading profit rose by 12.9% to €204m.

Earnings per share was up 19.3% to 80.2 cent on an adjusted basis and the group has signalled the payment of an 8.8 cent dividend per share, a 14.3% hike on the dividend payout.

Kerry said the improved results reflected “strong profitable growth in the first half of 2010, and by growing continuing business volumes by 5.8% on a group wide basis.

McCarthy said the Irish market looks to have stabilised.

The consumer foods business remained tough as the economic environment was affected by the poor state of the economy, which in turn made consumers more cautious.

In consumer foods overall sales in the group’s core British and Irish operations fell just short of €900m, recording growth of just 0.5%.

On a like-for-like basis trading profits rose 4.4% to €63m, while the trading margin was up 0.4% to 7.1%.

The group said continuing brand investment and a focus on value would continue to deliver results going forward.

In ingredients and flavourings, which account for nearly two-thirds of total sales, turnover in the first half rose by almost 4% to €1.8 billion, while profits were 9.3% ahead at €164m.

On the domestic front McCarthy said the group has well integrated the Breeo Foods operations, previously owned by Reox.

The Dairygold brand which came out of that stable performed well, he said.

Overall the group said the tough two years for the dairy sector were now behind them.