Shares in Kerry Group defy renewed Covid-19 global stocks selloff

Shares in Kerry Group defied a renewed sell-off for global stock markets as investors took heart in the resilience of its international food and flavourings operations.

An update from the company amid the Covid-19 pandemic showed that revenue rose 3.4% in the first three months, a period which covered the start of the lockdowns in many parts of the world from March onward, and at the same time, it maintained its trading margin.

Nonetheless, Kerry Group warned that the second-quarter results would be worse than the first quarter, as the “foodservice channel will continue to be impacted while restrictions in movement are in place”.

The food giant has 150 plants and employs 26,000 people across the world. It withdrew any guidance for earnings for the rest of the financial year on the basis that the ending of the Covid-19 crisis was just too difficult to call.

“The Covid-19 pandemic is a truly unprecedented event, impacting the daily lives of people across the world,” said chief executive Edmond Scanlon.

Kerry Group gave some reassurance to investors who are trying to assess the effects of the crisis on the customers and supply chains of food multinationals.

Investors are also trying to disentangle the financial results for many large companies in terms of the revenues and earnings generated in the first two months of the year and their subsequent performance in March when the lockdowns started to come into force across Europe and the Americas.

For Kerry Group, that means the division most to lose was foodservice, which supplies other large food makers with ingredients.

“We made a strong start to the year, with good underlying performance and particularly strong growth in the Americas,” Mr Scanlon said in the update.

Since March, the restrictions on movement have significantly impacted customer demand beyond China and across the foodservice channel.

However, the company said for its foodservice customers that after the “short-term disruption” there were “new opportunities created as a result of evolving consumer demands across the globe”.