Kerry says profit may rise 11pc
Kerry Group Plc said earnings may increase as much as 11pc this year as a restructuring helps to boost profit.
Kerry is “confident” of delivering earnings growth for 2010 to a range of 182 to 185 cents per share, from 166.5 cents in 2009, the Tralee-based company said today in a statement.
Kerry, the maker of Wall’s sausages and Charleville cheese, has closed factories and sold units to improve profitability. Net income climbed to €201.2m in 2009 from €177m the prior year as Kerry performed “robustly” in “a challenging environment.”
The results were “well ahead of expectations as very strong margin expansion compensated for lower sales,” analyst Paul Meade at NCB Stockbrokers in Dublin said in a note. NCB, which has a “buy” recommendation on the stock, raised its price target by 4pc to €26.
Kerry climbed as much as 75 cents, or 3.3pc, to €23.50, and traded at €23.50 at 12:02pm in Dublin. The stock has risen 14pc this year, giving the company a market value of €4.1bn.
Sales fell 5.6pc to €4.52bn, compared with the €4.7bn mean of seven analysts’ estimates compiled by Bloomberg.
The company plans to pay a final dividend of 17.3 cents per share, giving a total of 25 cents for the full year, an increase of 11pc on the prior year’s payout.
“We’ve had a pretty solid outturn for 2009,” Chief Financial Officer Brian Mehigan said in a phone interview. “We are seeing the benefits of the momentum from the restructuring.”