Kerry lifted by ready meals demand

Food giant Kerry Group today said the appetite for prepared meals had helped to deliver another year of profits and sales growth.

Kerry reported a 8.3% hike in sales to €2.1bn, with profits up 6.2% to €160m.

Kerry boss Hugh Friel said: "In a highly competitive trading environment, exacerbated by energy and raw material cost increases and adverse currency movements, the group performed well in the first half of 2005.

"We expect further business improvements in the second half, with an outcome for the full year in line with market expectations."

The continued depreciation of the US dollar and sterling exchange rates versus the euro again impacted reported sales and profit performance, Kerry said today.

Its food ingredients businesses, which accounts for two-thirds of revenues improves, while Kerry said the division was boosted by fast food chains putting a greater emphasis on serving healthier foods.

Kerry, which is based inTralee, said the performance of its portfolio of brands ensured it overcame the surge in energy costs to record levels and higher raw material prices.

In line with other food and flavouring makers, Kerry said the trading environment was challenging in Europe and in the US had not fully recovered from the end to the low-carb craze and hype surrounding the Atkins diet.

Today’s results come three weeks after Kerry paid £124m (€181.6m) for the Indian food firm started by spice king Gulam Noon in 1989.

That deal strengthened Kerry’s position in the ready meals sector as Noon Group supplies many leading supermarkets with curries.

Chairman Denis Buckley said the ongoing consolidation in the ingredients and foods sector should provide further opportunities for Kerry to acquire rival businesses.

“Our Irish and UK foods brands and customer-branded offerings are well positioned in industry growth segments,” Mr Buckley said.

“The group expects further business improvement in the second half, with an outcome for the full year in line with market expectations.”

In its biggest divisions, Kerry said sales of food ingredients totalled €1.45bn and were 3.8% higher than a year ago on a like-for-like basis. Its consumer foods businesses generated revenues of €820m – up 3.1% after stripping out the impact of currency swings.