Kerry Looking to Spend
February 23/Dublin/Irish Examiner -- Chief executive Stan McCarthy expects to spend 300 million euros extending the group's reach across ingredients, flavorings and in the chilled cabinet segment of its consumer food division.
Up to 1 billion euros could be spent on a "major deal," provided it fitted strategy.
Results for 2010 show strong performances from Kerry Group's ingredients and flavors operations were key in driving total sales for the year up 9.7% to 4.96 billion euros.
Earnings rose 11.35% to 470 million euros, while adjusted earnings per share (EPS) rose 16.8% to 194.5 cents.
Despite the pressure of significant raw material inflation in the year ahead, Kerry is guiding adjusted EPS for 2011 of 210c-218c.
According to the figures for the year ended December 31, 2010, the group reported solid trading margin improvement with ingredients and flavors, up 0.5% points to 10.9%. Consumer foods was ahead by 40 basis points to 7.5%. The group has declared a final dividend per share of 20 cents, pushing the total dividend for last year up 15.2% to 28.8 cents per share.
Dublin analysts reacted favorably to the results, with a number putting a buy recommendation on the shares as did the market with the shares 3.34% ahead, up 85 cents to 26.25 euros on the day. Goodbody's food analyst Lima Igoe was one analyst to put a buy tag on the shares. He said the group is trading at a "discount to its peers" while "internal restructuring as well as top line momentum" makes the shares worth investing in.
The group's ingredients and flavors businesses performed strongly across all markets and geographies in 2010, with sales revenue at 3,675 million euros, up by 12.7%. In consumer foods, economic conditions in Britain and Ireland, the group's core markets in that category, continued to adversely impact food and beverage demand. Kerry said shoppers were "budgeting cautiously for their grocery requirements" with "promotional activity playing an increasingly prominent role."
Divisional performance improved in the second half of 2010. Sales revenue in 2010 increased by 3.2% to 1,768 million euros. McCarthy said, "Business development in the group's established and emerging markets proved highly successful delivering strong volume growth and good margin progression. We achieved a 16.8% increase in earnings per share to 194.5 cent."
From the February 24, 2011, Prepared Foods' Daily News
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