Kerry's trading profits for 2013 up by 9%

Thursday 27 February 2014 10.37
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Kerry CEO Stan McCarthy reports a 'solid financial performance' for 2013
Kerry CEO Stan McCarthy reports a 'solid financial performance' for 2013
Kerry's new plant at Naas is under construction
Kerry's new plant at Naas is under construction

International food and ingredients group Kerry has reported increased trading profits for 2013 after what it called a "solid financial performance"

Kerry said its trading profits rose by 9.4% to €611.4m from €559m in 2012, but pre-tax profits fell to €121.9m from €315.5m the previous year.

Revenues for the year dipped slightly to €5.836 billion from €5.848 billion.

The company said that continuing business volumes during the year rose by 3% and pricing rose by 1.6%, which broadly offset input cost inflation of about 4%.

The Kerry board said it was recommending a final dividend of 28 cent per share, up 12% on the final dividend in 2012. Along with the interim dividend of 12 cent per share, this brings the total dividend for the year to 40 cent, up 11.7% on 2012.

Kerry shares were almost 2% higher at the end of trading in Dublin today.

The company said its performance last year reflect the strength of Kerry's taste and nutrition platforms and customer-focused business model - supported by its major investment in Kerry Global Technology and Innovations Centres and Regional Development and Application Centres in recent years.

It added that its developing market strategies continued to deliver strong growth and market development despite reduced economic growth in some regions.

The consumer foods markets in the UK and Ireland remained "highly competitive" due to negative underlying market growth rates, increased market polarisation and a continued high level of promotional activity.

"Our performance reflects continued business margin improvement and strong cash generation," commented Kerry's group chief executive Stan McCarthy.

"We ae well focused on our targeted nutrition, taste and developing market platforms for growth. Based on current exchange rates, the group expects to achieve 6% to 10% growth in adjusted earnings per share in 2014," he added.

A look at how Kerry's business divisions performed

Kerry said that revenue at its Ingredients and Flavours division rose by 5.9% to €4.327 billion, while trading profits rose by 10% to €558m with solid growth achieved across all it regional developing markets. Ingredients and flavours accounted for 73% of group revenue and 81% of group trading profit. 

The company said the programme to set up a Global Technology and Innovation Centre in Naas is well advanced and is on schedule to be operational early next year.

Revenues at its Consumer Foods division grew by 1.3% to €1.601 billion while trading profits fell by 2.9% to €129m as consumer confidence remained weak in Ireland and the UK during the year as inflation continued to outstrip growth in average incomes. 

Kerry said that its Brands Ireland division had a "mixed performance" in a higher competitive marketplace. Its Galtee and Shaws products performed well, while the Denny brand was impacted by heavily discounted private label products. 

In the Irish dairy products sector, Dairygold maintained its brand leadership in the spreads sector and saw 2% value growth. Cheestrings continued to expand its market positioning in France, Germany and the Netherlands and before the end of the year was successfully launched in Poland and Austria.