Food products are set to form up to 70 per cent of sales at foods group IAWS within the next three years, with the group planning to expand its ambient (non-chilled), chilled and frozen operations in Ireland, the UK and the US, its chief executive Philip Lynch has said. Mr Lynch was speaking after IAWS reported a bumper set of results for the year to the end of July, with pre-tax profits of €49.8 million (£39.22 million) and earnings per share of 31.4 cents (24.7p) well ahead of forecasts from the company's own broker, Davy, which had expected profits of €45.7 million and earnings of 29.6 cents.

IAWS's food business - which includes operations as diverse as flour milling, baking and distribution of a variety of ambient, chilled and frozen products - accounts for 40 per cent of sales and about 50 per cent of operating profits.

"If we didn't do another acquisition, that is likely to rise to 6870 per cent of our total sales within the next three years because of growth in the market, our commitment to production in the UK and the roll-out of Cuisine de France in the US," he said.

"We now have three great brands, Cuisine de France, Delice de France and Pierre's and they are all complementary to each other," he added. He said the recent purchase of Pierre's and the contract to distribute Green Isle frozen foods fitted in with the Shamrock ambient foods distribution business.

Turnover was 16 per cent higher on €982 million (£773 million) and the dividend has been increased by 15 per cent to 5.94 cents (4.68p) per share.

Mr Lynch said that roll-out of Cuisine de France in Chicago had gone "surprisingly well" and the operation was already at breakeven after investing $1 million (€1.18 million) in developing the business. Cuisine de France now distributes to 200 outlets in Chicago.

"We want to perfect the business first in Chicago and then look at opportunities elsewhere," he said, identifying large multiethnic cities like New York, Boston, Washington and Detroit as possible areas for expansion. "Fifty per cent of food is eaten outside the home in the US," he added.

IAWS disclosed that Cuisine de France co-founder, Mr Ronan McNamee, who received more than £25 million (€31.74 million) from the takeover, is to join the board, succeeding Mr Rory Toal who has retired.

The Irish fertiliser and animal feed operations benefited from improved livestock prices and capital investment, while a recovery in marine protein prices helped the protein and oils business to deliver a "satisfactory performance".

The full-year results also include a €6.5 million exceptional profit on the sale of the group's Barrow Street property in Dublin. Mr Lynch said that he expected the remaining properties in the Ringsend area to realise around €55 million, although the timing of this property windfall would depend on when IAWS went ahead with its planned £18 million flour mill in Dublin dockland. IAWS also has extensive surplus property in Waterford and Cork but there are no immediate plans for disposal.

The 1999/2000 earnings per share puts IAWS on a historic price/earnings multiple of 22.4. "We've got a good p/e but we deserve it," said Mr Lynch who added: "The difference between a low and a high p/e is hope and expectations. We're conscious of what we have to deliver but we have generated compound earnings growth of 23 per cent a year over the past five years."

Asked whether the IAWS Coop - which reduced its stake from 47 per cent to 42 per cent earlier this year in a share placing - planned to reduce its stake further, Mr Lynch said: "The co-op has no hang-up about ownership."