Kerry Group sticking to growth target

Kerry Group has kept its full-year growth targets unchanged despite reporting a better-than-expected 12% profit increase for the first half.

The Tralee-headquartered international food and ingredients giant, yesterday, beat some analyst forecasts with first-half figures showing a near 12% year-on-year increase in pre-tax profit to €137.2m, a 9.8% annualised rise in trading profit to €267m, 11.7% growth in adjusted earnings per share to 108.9c, and reported revenue of €2.95bn, up 1.1% on the same period last year.

After-tax profit for the period jumped from €104.6m to €117.4m.

Group chief executive, Stan McCarthy said both the ingredients and flavours and core consumer foods units are “performing well”, adding that management remains confident of achieving the group’s full-year growth targets.

Mr McCarthy said management was keeping to its previous guidance — for adjusted earnings per share growth — of 7%-11%; which would see full-year earnings come in at between 250c and 260c per share.

“The group achieved a strong financial performance in the first half of 2013 and continued to invest in enhancing the quality of our businesses,” he added.

Yesterday’s figures also showed an interim dividend of 12c, an 11.1% year-on-year increase.

On a divisional basis, the ingredients and flavours business — which represents nearly three quarters of group revenue — grew first half revenue by just over 4%, to €2.16bn, with trading profit growing by 11.6% to €239m — mainly driven by progress in the Asia-Pacific region and the Americas.

On the consumer foods side, revenues were down by just under 6% at €830m, with trading profit falling by 1.8% to €64m.

“Economic and fiscal pressures continue to impact consumer confidence in the Irish and UK consumer foods markets. As a result, conditions in both markets remained highly competitive during the first half of 2013, with shoppers continuing to respond to promotions, pricing and value offerings,” management said.

They adding that Kerry’s core business segments performed “well”, recording good branded growth in the UK market and a stabilised positioning in Ireland.

It added that while Kerry Foods was unaffected by the horsemeat scandal, from the early part of this year, confidence in some meat categories — including frozen meals — was impacted, resulting in lower sales, “due to the underlying weakness of the market”.