Kerry set to show profit of €240m
Profits before tax of between €235m and €240m are expected by analysts, with adjusted earnings per share of around 110c for the year.
More to the point, however, is where Kerry Group is headed in the near future. Until recently, it has had strong earnings growth, driven by strategic acquisitions that shot the company to the top of the food-ingredients business across the globe. Its strength remains in that category, which accounts for about 70% of group profits.
Not that it is weak in the other key category of food. It has strong positions in Britain and Ireland, supplying savoury goods and dairy products through brands, such as Dawn and Denny in Ireland and Matthessons and Wall’s in Britain.
America, north and south, accounts for 40% of profits, Ireland 18%, Europe 38% and Asia Pacific 4%. The last is a market under development and the group sees big potential in China.
One of the difficulties facing the group, however, is that the type of acquisitions in food ingredients that underpinned its growth have become expensive.
In the past two years, Kerry has refused to buy Bush Boake Allen in the US and more recently Haaman & Reimer in Europe, as the multiples of earnings could not be justified.
Sales for the end of the current year are forecast to improve just marginally from last year to €3.8bn, with a further modest pick up to just over €4bn anticipated for 2004.
Liam Igoe, food analyst with of Goodbody Stockbrokers believes Kerry is looking at 10% earnings growth in the years ahead, unless acquisitions follow, something that is almost a given in Kerry’s case.
Davy Stockbrokers believe the group will produce low double-digit earnings growth in the years ahead.
