Kerry Group shares rise by 3pc on further strong annual results
Growth in company's revenue and profits driven by ingredients and flavours arm
Published 23/02/2011 | 05:00
SHARES in Kerry Group rose more than 3pc yesterday after the company released another set of strong annual results -- despite rising commodity prices.
The agri-foods giant increased adjusted earnings after tax by 17pc to €340.9m on the back of revenue that increased 9.7pc to just under €5bn.
Those figures translated to adjusted earnings per share that increased by 16.8pc to 194.5c. The final dividend was increased by 15.6pc to 20c per share.
The growth in revenue and profit was driven by Kerry's ingredients and flavours arm, which now makes up most of the group's business. It saw revenue increase by nearly 6.6pc but, as with the overall results, profits comfortably beat the revenue increase, jumping by 12.8pc.
The business managed to increase its margins by 11pc despite what the company described as a "significant upward trend in input costs, including cereal, dairy, sugar and energy costs" in the second half of the year.
The consumer foods side of the company saw much lower levels of growth, with revenue increasing just over 1pc and trading profit rising by 5.3pc.
Margins increased by 7.5pc. For this year the company said it expects adjusted earnings per share of between 210 and 218c.
Chief executive Stan McCarthy was pleased with his firm's performance but warned that the Irish market was still "challenging" and added that inflation was a "concern".
"The first half of 2010 here was quite tough but it has since improved to the point where we have some stability, albeit fragile," he said.
"Looking at inflation, it definitely is a concern, especially in emerging markets like Brazil, where it's currently rampant.
Davy Stockbrokers' John O'Reilly said: "These results and the 2011 outlook firmly establish Kerry Group as a growth company with fine prospects.
"In absolute terms, the results amply demonstrate the rewards of Kerry's 'go-to-market' strategy and the strength of its applications technology portfolio. We believe that the shares can continue to perform."
Kerry closed up 3.35pc at €26.25.