Kerry remains on track to deliver mid-teen growth

GLOBAL ingredients and consumer foods group Kerry said it remains on track to deliver mid-teen growth for the current financial year.

The Tralee-based multinational food group, said mid-teen adjusted earnings per share will be achieved in the current financial year as previously indicated. This will be done despite unfavourable currency movements and rising raw material costs.

In a trading update to the markets yesterday, Kerry Group said the momentum of the strong first-half year has been sustained into the third quarter.

Solid organic growth in the three months to September 30, 2010, was achieved while in the first nine months of 2010 sales revenue rose 8.7%, giving like-for-like growth of 3.5%.

Business volumes rose 5.3% after a restructuring volume loss of 0.7%, a dip of 0.9% in the overall pricing mix and a negative currency impact loss of 0.2%.

The group’s dominant global ingredients and flavours operations reported volume sales 6% up on the first nine months of last year.

The group also reported that its trading profit margin increased by 30 basis points. It said the boost to the trading margin overall underpinned an improvement of 0.5% in ingredients and flavours and a 40 basis points increase in consumer foods.

Shares in the group responded well to the market update and were up 24 cent or 0.89% on the day.

The group said that the performance throughout Kerry Ingredients & Flavours’ end-use-markets remained strong in all regions.

The Americas recorded “excellent progress across its core technology platforms and end-use-markets delivering 5.2% growth in continuing business volumes”.

In keeping with earlier indications from chief executive Stan McCarthy, the group said it recently acquired California-based Agilex Flavors, said to be a leading developer and marketer of sweet, fruit and brown flavours for health and wellness applications in nutritional, beverage, bakery and confectionery end-use-markets.

In October the Group completed the acquisition of Newmarket Creameries – a leading manufacturer of cheese from a state-of-the-art cheese production facility located in Co Cork, which is a major supplier of cheese to Kerry Group’s branded cheese business.

Cash flows remain strong and net debt at the end of the period at €1.04 billion was €160m below that reported at the half year.