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Kerry Group posts sales boost in ‘adverse’ market

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By James Ridler+

11-Aug-2017
Last updated on 11-Aug-2017 at 13:31 GMT2017-08-11T13:31:26Z

Kerry Group has posted sales growth, despite adverse currency movements
Kerry Group has posted sales growth, despite adverse currency movements

Irish food and ingredients manufacturer Kerry Group has posted a £130M rise in sales in its half-year trading report, despite the company facing “significant adverse currency movements”.

Kerry – owner of the Richmond sausage brand – sales grew 4.8% to £2.88bn (€3.18bn) in the six weeks to June 30 2017, up from £2.75bn (€3.04bn) for the same period last year.

Adjusted earnings before taxation rose to £264M (€292M) from £245M (€271M). Kerry’s adjusted earnings per share grew 7.5% to 130p (143.8 euro cents).

The completion of three acquisitions by the company – Tianning Flavours, Taste Master and Ben Alimentos – had created £16.1M (€17.8M) of costs, bringing profit after taxes down to £203M (€225M). Profits after tax were still £2.43M (€2.7M) higher than the first half of last year.

Adverse currency movements

Kerry said it had maintained a strong overall business performance in the first half of this year, despite significant adverse currency movements and increased raw material pricing.

“Business volume growth rates outpaced industry levels, capitalising on Kerry's unique taste and nutrition technologies and systems which are well positioned to deliver innovative solutions for the group’s global, regional and local customers in response to ever-changing consumer requirements,” said the company. 

“Whilst the retail environment remained challenging across European markets, the continued growth of out-of-home consumption and channel diversification provided good opportunities for growth and market development.” 

Growth of out-of-home consumption

Demand for enhanced nutrition, clean label, authentic, sustainably produced products had provided a strong platform for growth, Kerry said. Growth in the foodservice channel outpaced growth in traditional retail outlets.

Commenting on the results, Kerry chief executive Stan McCarthy said: “Against a background of significant adverse currency movements, we achieved a strong overall business performance in the first half of 2017, outperforming market growth rates and delivering a 7.5% increase in adjusted earnings per share.

“Taking into account increased currency translation headwinds of 4% and a 2% improvement in underlying performance at constant currency rates, we now expect to achieve growth in adjusted earnings per share of 3% to 7% on a reported basis to a range of 333.1 [301p] to 346 [313p] cent per share.”

Meanwhile, nutrition firm Glanbia reported a 9.9% rise in group revenue, at constant currency, to £1.67bn (€1.85bn), after starting a new joint venture and selling 60% of its Dairy Ireland business.

Kerry Group results – at a glance

 

Percentage change

H1 2017

H1 2016

Sales

4.8%

£2.88bn

£2.75bn

Profit before tax

7.2%

£264M

£245M

Profit after tax

0.5%

£203M

£202M

Adjusted earnings per share

7.5%

130p

120p

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