Wednesday 26 June 2019

Kerry CEO plays 'long game' as shares slide

Kerry Group chief financial officer Brian Mehigan and CEO Edmond Scanlon as the food giant announced its results at the Westin Hotel. Photo: Tony Gavin
Kerry Group chief financial officer Brian Mehigan and CEO Edmond Scanlon as the food giant announced its results at the Westin Hotel. Photo: Tony Gavin

Colm Kelpie and Ellie Donnelly

Kerry Group CEO Edmond Scanlon has said he's focused on the "long game" after the group's share price tumbled 5pc.

The fall came despite revenue at the group soaring to €6.4bn in 2017 as the company benefited from a 4.3pc growth in its business volume.

Trading profit at the company was €781m, a 4.2pc increase year-on-year.

Mr Scanlon said the company was "happy" about its current preparations in the event of a hard Brexit, but he warned that elements of the operation at its Carrickmacross plant will have to be looked at.

Its products go directly into the UK market. "That plant is an important plant in the overall network," he said.

"It is important that that plant is as efficient as it possibly can be, as it's going into the UK market. If there are trade barriers and all that stuff, we're going to have to re-look at it. It's just a reality.

"Right now, it's important that we try and make that plant as efficient as we can."

Siptu union representatives have already called on the management of Kerry Foods to reconsider its threat to make 31 people redundant without agreement at the Carrickmacross factory.

In its preliminary statement of results for the year to December 31, 2017, the group said that the growth in business volume reflected it's technology capabilities and speed of innovation in response to consumer and customer requirements.

"Kerry Group delivered strong top-line growth and sustained business development in 2017," Mr Scanlon said.

"Adjusted earnings per share increased by 5.5pc reflecting 9.4pc growth over the prior year on a constant currency basis. In 2018 we expect to deliver adjusted earnings per share growth of 6pc to 10pc on a constant currency basis."

The company's taste and nutrition business saw its volume growth increase by almost 5pc year-on-year to €5.2bn, while its consumer foods business recorded revenue of €1.3bn, a 2.4pc increase in volume growth on its 2016 performance.

During the year the group completed eight acquisitions at a cost of €397m.

The acquisition of Hangman Flavours in China was completed shortly after year end.

On the matter of Brexit, the group said that it was "very well-positioned" to deal with the potential challenges and realise the opportunities that will arise from it.

"We don't know what the timing of these negotiations are going to be and how long it's going to take," Mr Scanlon added. "We feel OK about where we are. We'd prefer if it didn't happen. Assuming it will, I think we're happy with where we are from a preparation standpoint."

The company said 3pc of its total business on a revenue basis is exposed to the UK.

The share price closed down over 4.8pc to €81.65.

"I don't take a huge amount of notice of what happens from one day to the next on our share price. Our game is a long game and we're going to do the right thing for our shareholders for the long term. That's been our strategy for a long time, and that's not going to change on my watch."

Irish Independent

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