Lifestyle Food drives IAWS profits up 23% to €42.8m

FOOD Group IAWS Plc has produced strong first-half results driven by good growth in its Lifestyle Food businesses, where overall profits before tax and exceptional items rose 23% to €42.8 million.

Diluted earnings per share were up 20.5% to 26.6c per share while group sales, including share of joint ventures, rose 9% to €653.3m.

IAWS shares were up by 7 cent to €11.85 by mid-afternoon as the market responded positively to the figures. These were in line with or slightly ahead of expectations, but with the second half the stronger of the two, much will hinge on how the group delivers in the second six months.

Sales in North America rose 20% due to added capacity while joint ventures and associate activities yielded strong profit returns in the first six months of the current year.

They nearly doubled and rose from 8m in the first half of last year to €14m in the six months ended January 31, 2005.

In New Jersey, the opening of the new La Brea bread plant adds significantly to its presence in the market giving the group additional capacity on top of strong national distribution into 7,000 stores in the US. That move brings with it added opportunities to the Cuisine de France range in that market.

At this stage Cuisine accounts for 20% of sales and La Brea 80% of the group’s bread and savoury par baked food offerings in the US.

Also in its Lifestyle Foods category the addition of Groupe Hubert of France to the operations adds significantly to the range of goods IAWS will be able to offer across this sector of its business going forward.

It was not planned, said Owen Killian, IAWS chief executive. It was an opportunity that came up and could not be ignored, he said. His observation implied that IAWS will attempt to deliver on the market opportunities it has opened up in the sector.

The first half has shown a good strong story out of the US, he said. Conditions are looking good and “we have no worries about the US,” he said.

Reviewing the current situation, Mr Killian said agri-trading and fertilisers still account for 20% of group profit and are important in the overall development of the group.

It suffered a setback in the first half due to weak demand for feedstuffs following bumper cereal and sugar beet harvests. As a result operating profits in the nutritional and agri-trading side fell 19% to €7.3m at the operating profit level against €41.3m for food.