Kerry Group earnings per share growth beats forecasts

Kerry Group is anticipating earnings per share growth of 7% to 11% for 2013, on the back of a set of 2012 figures which largely beat market forecasts.

The Tralee-headquartered food giant yesterday reported adjusted earnings per share of 237.6c for 2012, a rise of 11.3% on the previous year and 1% higher than analyst forecasts.

The figure also comfortably came within Kerry’s own guidance of 8%-12% growth.

However, the group’s heavy acquisition round ate into profits. While Kerry’s underlying pre-tax profits rose by over 11% to €482.1m, on a post-exceptional basis — mainly reflecting integration costs of nearly €400m worth of acquisitions — pre-tax profits fell by just over 25% to €324.1m, with after-tax profits down by 26% to €267m.

Trading profit, however, increased by nearly 11% to €555m.

Group sales revenue increased by 10.3% to €5.8bn. The group has recommended a final dividend of 25c, upping the total annual dividend per share by 11.2%, to 35.8c. Net debt fell during the year, from €1.29bn to just over €1.2bn.

The ingredients and flavours division drove Kerry’s growth in 2012. The unit’s revenue rose 14% to over €4.2bn and trading profit grew by 15.1% to €506m.

However, the consumer foods division also grew — albeit at a much slower rate — with revenue up by 2.3% to €1.71bn and trading profit rising by 0.1% to €130m.

The ingredients business saw solid growth in the Americas — with revenue up by 16% to €1.8bn — and in Europe, theMiddle East, and Africa, with revenue rising by 9.5% despite the challenging economic landscape.

The unit’s main growth was seen in the Asia-Pacific region, where revenue growth of just under 20% — to €726m — was recorded.

Kerry Group’s chief executive Stan McCarthy yesterday said the company has made “an encouraging start” to 2013.

He also touched on the ongoing horsemeat scandal, saying that while Kerry’s products have not been directly tainted, sales volumes of some of its frozen food products have been hit by over 20%.

However, he said this is not a significant revenue generator for Kerry and the group can absorb any such movements in that area of the business.