Kerry Group revenues up 10% to €5bn in year

KERRY GROUP surpassed market expectations yesterday with full-year results which showed a 10 per cent jump in revenues to €5 billion. Trading profit rose to €470 million, an 11.3 per cent increase on the previous year.

The company’s ingredients and flavours division – which accounts for approximately 75 per cent of profits – continued to be the main driver of growth, with revenues increasing by 6.6 per cent to €3.7 billion, and margins up 50 basis points.

Revenues at its consumer foods division grew by 1.3 per cent to €1.8 billion with trading margins up 40 basis points, an improvement on the first half of the year.

While the Irish market remained challenging, Kerry stabilised the performance of its branded businesses in Ireland through investment in marketing and brand repositioning, the company said.

Its performance in the UK consumer market was healthier, with branded products such as Richmond sausages and Cheestrings seeing good growth, while its private label businesses also performed well. In particular, the company highlighted the strong performance of its chilled ready meals business, which outperformed overall market growth to become the largest supplier in the UK chilled ready meals marketplace.

Kerry Group is one of the world’s largest food and ingredients companies, with customers in more than 140 countries.

Within its ingredients and flavours division, the emerging markets sector was a key player, posting double-digit growth. Revenue in the Asia-Pacific region jumped by 26.1 per cent to €509 million, while the Americas region, which includes North American markets and Latin America, saw revenue increase by 14.9 per cent to €1.48 billion.

There was also good news for shareholders yesterday with the company announcing a 15.2 per cent increase in dividends to 28.8 cent.

Adjusted earnings per share was up 16.8 per cent to 194.5 cent.

Net debt to ebitda (earnings before interest, taxes, depreciation and amortisation) contracted from 2.2 times in 2009 to 1.8 times, while the company had free cash flow of €305 million, compared to €367 million in 2009.

Chief executive Stan McCarthy said yesterday that while higher input costs was a concern for the business, Kerry was well positioned to reach its targets for 2011.

He said the company – which made 10 bolt-on acquisitions in 2010 – will most likely spend “north of €300 million” in acquisitions next year, though this figure could potentially reach €1 billion if required.

While declining to comment on specific acquisition plans, he said the company had a “strong acquisition pipeline” and would be particularly interested in the branded sector.