Currency headwinds fail to deter Kerry

Kerry Group has maintained its growth forecasts for 2014, despite currency headwinds dragging down first-quarter revenues by nearly 2%.

In a trading update, issued ahead of its AGM in Tralee yesterday, the international food and ingredients group said that it still expects to achieve adjusted earnings per share growth this year of between 6% and 10% to a range of 273c to 284c.

Management said that reported first-quarter revenues were down by 1.7% on a year-on-year basis due to “the adverse translation impact of significant currency headwinds”.

Nevertheless, continuing business volumes grew by nearly 3%, net pricing was up by 0.4% and underlying sales growth of 3.3% was achieved in the period.

On the back of that, Kerry’s management said the group had achieved a “satisfactory” performance in the first three months of the year, despite the aforementioned currency problems and challenging conditions in many of its markets.

“Following a relatively sluggish start to the year, performance in all regions improved in the latter part of the first quarter,” the company said.

Kerry’s net debt amounted to €1.2bn as of the end of March, in line with expectations and reflective of capital expenditure and working capital investment initiatives during the period.

Kerry repeated yesterday that it is focused on strengthening the consumer foods division’s product portfolio which, through brands like Cheestrings and Richmond, did well in Britain in the quarter. In Ireland, management said the consumer foods market has shown signs of stabilisation, but added that private label and discounter offerings continue to gain market share in certain key categories.