Food company Kerry Group has reported a 10% rise in sales to €2.9 billion for the six months to the end of June.

It raised its 2012 earnings forecast on the back of higher margins in its key ingredients business.

One of the biggest companies on the Irish stock exchange, the company said it now expects to achieve 8-12% growth in adjusted earnings per share in 2012.

It said that its ingredients and flavours business, which represents about two thirds of revenue, helped to compensate for continued weakness in some consumer food markets.

Kerry's pre-tax profits rose by 13.7% to €208.6m from €183.4m the same time last year.

In an interim management statement, the company said it was increasing its interim dividend per share by 10.2% to 10.8 cent.

Kerry noted that many markets, including Ireland, are still grappling with the effects of recession, depressed consumer spending and a heavy level of discounting by consumer food firms to win market share.

Its shares closed 6.1% higher in Dublin this evening.

Breaking down its divisions, Kerry said that revenue at its ingredients and flavours business rose by 14% to €2.074 billion, while trading profits increased by 17.2% to €213m.

The division's performance was boosted by the impact of acquisitions completed last year including Cargill's flavour business, SuCrest and General Cereals.

Revenue at its consumer foods division rose 1.8% to €881m while trading profits also grew by 1.8% to €64m. The company said that the increases were achieved despite the impact of the economic situation in Ireland and the UK on consumer trends and spends.

''We remain confident of achieving our strategic growth objectives for the full year, and taking current trading conditions into account, the group has revised adjusted earnings per share guidance upwards. We now expect to deliver 8-12% growth in adjusted earnings per share in 2012,'' the company said in its statement today.

Kerry group's chief executive Stan McCarthy said that the company has a strong innovation pipeline and continues to make good profess in implementation of its 1 Kerry Business Transformation programme.

This two year programme includes the integration of recent acquisitions, streamlining of existing manufacturing facilities and the sale of non-core activities. Kerry expects the programme will incur a charge of about €200m, with a cash cost of just over €100m before any disposals.