Kerry Group still looking to buy after €1bn spend

FOOD giant Kerry Group will continue to target acquisitions that "tick the boxes" in developing markets, after spending €1bn on new firms to expand its portfolio in the past two years.

Revenue across the group rose by 4.8pc in the first half of the year to €3.2bn, with 3.8pc growth in the volume of business transacted.

However, chief executive Stan McCarthy, who steps down from the post at the end of September, said the results were coming against a background of "significant adverse currency movements".

He said Kerry had guided growth in earnings per share of 5pc to 9pc at the exchange rates in February. However, with the impact of increased currency translation headwinds of 4pc, it expected to achieve growth in adjusted earnings per share of 3pc to 7pc in 2017.

The firm will be delivering an 18.8c interim dividend per share, up almost 12pc.

The taste and nutrition side of the business recorded the biggest volume growth at 4.2pc, with profits of €331m up 8.8pc in the first half of the year.

Despite two of their recent flavour acquisition businesses being based in China, Mr McCarthy stressed it was looking at developing markets worldwide.

Incoming chief executive Edmond Scanlon, who previously headed Kerry Group's Asian division, said that despite the fragmentation of the market it had a strong footprint in that region. A new five-year plan for the Kerry Group will be unveiled in October when Mr Scanlon takes the reins.

Mr McCarthy said the group has always taken planning extremely seriously as it gives it the ability to adjust to challenges, pointing to the "geo-political stability" and Brexit.

Financial officer Brian Mehigan said the group was "very well-positioned" to deal with Brexit as 90pc plus of what it sells in the UK is manufactured there. "Around 95pc of everything we manufacture is sold in the currency of manufacture," he said.

Mr McCarthy said Kerry was looking to mainland Europe for dairy snacking markets, as he emphasised the changing way people shop.

"It is becoming an increasingly fragmented marketplace," he said. "Clean label, nutritional, natural and convenience food is driving product innovation and out-of-home consumption has continued to grow."

He said there had been a rise in e-tail and convenience stores at the expense of traditional shopping.

Mr McCarthy said lifestyles such as 'flexitarianism' or semi-vegetarian was becoming more prevalent in the developed world.

"That type of change is driving growth for natural flavours or alternative proteins," he said.