Food group IAWS said its pre-tax profits for the six months to the end of January rose by 26% to €34.8m, slightly beating market expectations. Diluted earnings per share increased by 25% to 22.1 cents.
IAWS said that both the food and nutrition/agri divisions were affected by currency factors and by more challenging markets. It said that reported turnover growth of 4% to €599.7m does not reflect the strong growth achieved before movements in sterling and the US dollar against the euro. The actual increase in total underlying turnover was 8%.
'The second half of the year has seen a solid start and we are confident of a satisfactory performance for the period,' commented IAWS Group CEO Owen Killian.
'The group continues to build a range of strong market positions within each of its industry sectors, in tandem with broadening its geographic base,' he added.
IAWS said its investments in associate and joint venture companies contributed significantly to earnings, with operating contribution increasing to €8m from €2.8m for the six month period. These businesses, which include Tim Hortons joint venture in North America and Swiss gourmet bakery A Hiestand Holding, now contribute 20% of the group's total operating profit.
The company said its Irish food operations performed well and maintained momentum. Underlying sales growth of over 6% within lifestyle foods demonstrates the resilience of its specialty foods business model, it said. Sales also benefited from new product introductions.
In its UK market, Cuisine de France had a 'solid' first half performance and continues to exploit opportunities in the rapidly changing UK convenience food market. Delice de France had a satisfactory sales performance in a challenging foodservice market during the six month period.
IAWS said the key objective for the UK food business continues to be the development of enhanced operational capability in order to gain market share and improve cost efficiencies.
IAWS' operations in North America performed well in the first half of the year, but currency movements impacted adversely on the translation of dollar sales and operating profits. La Brea, the artisan bread business, had underlying sales growth of 13% and this growth is expected to increase when a new facility comes on stream later this year.
The company's Canadian joint venture, Tim Hortons, had a particularly strong performance, with growth of 7% in Canada. IAWS said the primary focus in North America has been on realising the huge growth potential of the market and the company has invested €200m to gain a foothold here.
Underlying sales in the company's nutrition/agri business grew by almost 11% driven by higher commodity prices in feed and fertiliser. But fertiliser sales were slow in Ireland, while weaker fish meal and fish oil prices had an impact on performance in the marine protein and oil business.
The animal feed business delivered a satisfactory performance with sales volumes in line with expectations.
IAWS shares closed down one cent at €9.74 in Dublin.
