Kerry Group’s investor day wins approval

KERRY Group’s investor day in London was the best supported ever according to reports yesterday.

Goodbody Stockbroker’s food analyst Liam Igoe said the numbers reflected the growing view that the Tralee-based multinational food and ingredients business has something special going for it as a group.

The view in Britain is growing that the group’s “unparalleled success was not a 25-year flash in the pan,” said Mr Igoe.

Kerry has evolved a model that has delivered consistent earnings growth, combined with low volatility which has “proved itself in good times and bad”.

At the presentation Kerry reaffirmed it is on target to continue growth in both margins and sales despite the backdrop and some input price inflation.

Kerry Foods has witnessed 2% volume growth on both sides of the Irish Sea, although deflation remains an issue in Ireland, he said.

It is down to 2% against 8% two years ago, and that has made a significant change to the trading environment for the group’s food operations here, he said.

At the presentation Igoe said the group highlighted its belief that ingredients appears to be gaining market share thanks to the restructuring via the “go to market” programme.

Also the inauguration of its expanded and integrated R&D facility in Beloit in the US has raised Kerry’s profile with its major international customers who can avail of dedicated product research being done on their behalf by Kerry.

Since Stan McCarthy took over as chief executive he has stressed the huge potential Kerry’s R&D and scientific expertise offers to its major base of global food clients.

Davy’s, who are brokers to Kerry, have been enthused about the group’s go to market strategy since its inception and has said the impact that Beloit is having on the status and capability of the group with international clients is significant.

Mr Igoe in his summary of the day believes the group will make some acquisitions before the year end which could include ingredients in Asia, a foods business in Britain (branded rather than private label) and other bolt-ons in the group.

“The company is evidently very confident about sustaining earnings growth in the coming years through organic means, as well as through acquisition. It is those dynamics that underpin our continued positive stance on the stock, therefore we reiterate our ‘buy’ recommendation,” he said.

Picture: Kerry Group CEO Stan McCarthy