Kerry Group has reported pre-tax profits of €335.8m for 2009, up 6% on the previous year despite what the company called the challenging economic conditions.
Annual revenues at the company fell by 4.8% on a like-for-like basis to €4.5 billion. But the group added that sales volumes at its continuing businesses were 2.2% ahead due to restructuring programmes, currency movements and the elimination of non-core activities.
Kerry said that its adjusted earnings per share increased by 8.2% to 166.5 cent, and the board is recommending a final dividend of 17.3 cent per share, up 10.9% on the 2008 final dividend.
The food group said that it is confident of delivering earnings growth in 2010 between a range of 182 and 185 cent per share.
The group's ingredients and flavours business made a trading profit of €340m last year, up 4.9% on the previous year as revenues dipped 4.5% to €3.26 billion. It said that the weaker economic situation throughout its American markets last year impacted food and beverage consumption trends while home consumption grew at the expense of foodservice demand.
It added that market conditions in the European, Middle East and African regions were also tough as reduced consumer spending impacted trends in most of its categories.
Kerry's consumer food business saw flat trading profits of €122m, while revenues rose by 6.1% to €1.7 billion. It said that its brands in the UK market performed well, but its brands underperformed in Ireland.
Economic downturn hits Irish markets
The group said that consumer spending was hit in Ireland and the UK due to the economic downturn. It noted that consumer spending in Ireland fell by 7.5% and as a result, consumers increasingly shopped for bargains and cheaper own brand products.
However, it said the purchase of Breeo Foods at the end of March brought a strategically important group of Irish food brands, including Dairygold, Galtee and Shaws, to the group.
It said in the sausage, rasher and pre-packed sliced meat categories, its brands underperformed due to intense competition from private label and own brands. It said that major investment plans were launched in the last quarter of 2009 to reposition Denny, Galtee and Shaws and encouraging results were seen by the end of the year.
Kerry said that its Dairygold and Low Low butter brands held their positioning, while Golden Cow lost ground to cheaper offerings.
The Irish cheese market fell slightly both in volume and value with the Charleville brand maintaining its status as the number one cheese brand in the market.
The year proved to be a very difficult one for the Freshways pre-packed sandwiches and food-to-go products across the retail, travel and foodservice sectors. During the year the brand was relaunched with a big investment in new packaging.
'The Kerry business model has performed robustly through the recent challenging economic environment in major consumer markets,' the group said in its results statement.
'In the group's consumer foods UK and Irish marketplace, the brand strategies and investment programmes now in place will enable our leading brands to compete successfully and position our offers for the value focused consumer,' it added.
Kerry shares closed up 2.4% at €23.30 in Dublin.
