Food group Kerry has reported an increase in profits for the first six months of this year despite a drop in total sales.
The group said pre-tax profit before once-off items rose by 5.2% to €136.8m, while trading profit rose by 4% to €180m. This was despite a 3.2% dip in sales to €2.27 billion. This was because its profit margins were higher, particularly in its ingredients and flavours business.
Kerry has increased its interim dividend by 11.6% to 7.7 cent. Adjusted earnings per share were up 7% to 67.2 cent and the group has said earnings for the full year will be at the upper end of the 160 to 165 cent forecast at the start of the year.
Chief executive Stan McCarthy said the group's technologies and brands had performed well in a difficult economic environment.
Asked about a loss of market share for some of its Irish brands, he told RTE radio the company had been doing a lot of promotional activity and would also have to look at some of the prices of its brands. Mr McCarthy said people were doing a lot less 'impulse shopping' and this had affected its Irish convenience foods business.
He said other regions were doing better, and Asia was continuing to do very well for the company.
Kerry shares closed 20 cent higher at €18.05 in Dublin this evening.
Consumer changes affect Kerry business
Kerry said food consumption trends were affected as consumers became more budget conscious, with sales through convenience stores and food-to-go channels reduced.
A breakdown showed that profits in the ingredients and flavours arm were up 4.5% to €144m as sales dropped marginally, but raw materials costs dropped by around 25%.
But profit in the consumer foods division was unchanged at €57m as revenue fell 7.7% to €857m.
