IAWS profits rise 21% to €27.6m

IAWS has reported better-than-expected interim profits driven by continued growth of its key Cuisine and Delice de France brands.

The company has also announced plans to invest up to €40 million in a new production facility in the US as part of the rollout of its La Brea artisan bread products.

This facility will be constructed on the East Coast at the existing site in New Jersey.

Pre-tax profits rose 21% to €27.6m in the six months to the end of January.

Underlying sales rose by 6%, while adjusted earnings per share rose 23% to 17.6 cents.

Sales rose to 576.4m and the dividend was increased by 15% to 4.3c per share.

Chief executive Phil Lynch was confident for the second half of the year, saying that overall the group would not be expecting any negative impact from a continuing economic downturn in the US.

“Our products are not really affected by the economy, they are what people eat every day so I don’t think economic problems would stop people buying our products,” Mr Lynch said.

“We have a track record of delivering. It has been one-way traffic here for 20 sets of results. We’ve never been in better shape. Our repositioning has worked really well.”

He added that the joint venture with the Canadian Tim Hortons restaurant chains will contribute to profits this year.

It made a small loss in the six-month period in the “hundreds of thousands”.

Mr Lynch said IAWS would look to have its first production facility under construction in Britain this time next year. Land has been purchased in the Midlands and he was hopeful yesterday of work beginning soon.

In Britain, Cuisine de France and Delice de France, also performed well.

IAWS said Cuisine de France continues to capitalise on opportunities in the stg£20 billion a year convenience food market. IAWS said the focus for Delice de France going forward is to increase its penetration levels outside the Greater London area.

The group’s British fertiliser business had a difficult first half with the overall market suffering the effects of low pricing and income pressure at farm level.

But with reduced product availability, prices are expected to increase substantially in the second half of the year.

The Goulding business delivered a “satisfactory performance” during the six months, while the protein and oil business and feed businesses delivered similar results.