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Kerry post 12pc profits rise in 9 months

Wednesday, October 31 13:00:17

Irish food sector giant, Kerry Group, today posted a 12.1pc rise in profits for the first nine months of this year with sales revenues up by 10.9pc to E4.4 billion.

Looking to the full year, Kerry said it is confident of achieving its growth targets for the full year and delivering nine to eleven per cent growth in adjusted earnings per share.

In line with the business momentum reported at the half year stage, the Group's underlying trading margin performance remained strong in the period, its Interim Management Statement said today.

It said that, despite increased unallocated development costs relating to the Group's ongoing 1 Kerry business transformation programme and global IT project and the dilutive impact of 2011 acquisitions, the Group trading profit margin increased by 10 basis points relative to the same period of 2011. This reflects a 10 basis points increased margin in Ingredients & Flavours and an unchanged margin in Consumer Foods.

Looking at the group's divisions, revenues in ingredients and flavours increased by 14.8pc on a reported basis, reflecting 3.5pc like for like (LFL) growth. Continuing business volumes grew by 2.9pc outperforming growth rates in its markets, Kerry Said.

Against what it described as a backdrop of competitive, promotionally driven consumer foods markets in Ireland and the UK, Kerry Foods maintained a "satisfactory" overall business performance. UK branded segments performed well. In Ireland Kerry's dairy brands also progressed well but brand performance in the meat category was impacted by intense price driven competition from private label and discounter offerings. Sales through independent retail channels were also adversely impacted by such trends, it said. In the nine months to the end of September reported revenues in Consumer Foods increased by 2.4pc reflecting a 0.9pc decline LFL. Continuing business volumes increased by 0.6pc and pricing / mix reflected a 0.5pc increase. Restructuring of production across a number of Foods' sites resulted in a 2.1pc rationalisation volume loss.

At the end of the nine-month period, net debt stood at E1.4 billion, which was similar to that reported at the half-year stage despite increased investment in development capital expenditure, footprint optimisation and acquisitions, it said.