Kerry shares up on back of healthy numbers
Published 03/11/2011 | 05:00
SHARES in Kerry Group rose marginally yesterday after the food giant said its performance so far this year had been slightly ahead of market expectations.
In an interim management statement, the company said the Irish consumer market continued to struggle along with the rest of the Dairy Ireland business but, as forecast, the ingredients and flavours division still performed positively.
Group sales revenue in the first nine months of the year grew by 7.3pc on a like-for- like basis.
Volumes in the ingredients and flavours business were up 3.9pc and 1.6pc in consumer foods.
Net debt rose slightly to €1.2bn but the group said that it remained on target to grow earnings per share by 8pc to 12pc for the full year.
Despite the strong numbers -- analysts had been expecting revenue growth of between 5pc and 7pc as well as a decline in consumer foods volume -- the Irish- focused arm of the business continued to struggle, with volumes falling 2pc.
"The Irish consumer foods market remains difficult as consumers continue to seek value propositions and retailers respond through deeper promotional activities," Kerry said.
"Brands share of Kerry's key Irish brands remain stable and grown through value lines," the company added.
Despite the problems in the consumer foods division -- the British private label spreads and cheese business was "adversely affected" by very strong promotions from the major brands -- Ingredients & Flavours (I&F) continued to post strong growth.
The higher margin I&F division now accounts for about three-quarters of Kerry's business and the US market continued to grow, adding 3.6pc to its volumes.
The interim management statement was welcomed by analysts.
"The Consumer Foods business is performing better than we expected in the current environment.
"I&F is continuing its strong like-for-like growth and passing through price increases successfully," said NCB's Darren Greenfield.
Kerry closed up 0.71pc at €26.35.