Kerry’s results dented by horsemeat crisis
“Category growth rates in chilled ready meal and frozen ready meal categories were reduced due to the equine DNA issues which unfolded during the first quarter and by the hotter than usual summer weather conditions,” said the firm.
While frozen meals sales recovered during the year, the category still reflected an 11% decline by year-end, compared with previous year.
The chilled ready meals category achieved 2% value growth year-on-year, with ready-to-cook recording similar value growth. Although cheese slices performed well, customer branded dairy spreads lost market share to what the firm called “heavily promoted branded offerings”.
‘Heavily promoted branded offerings’
Meanwhile, the firm said it delivered “a solid performance” in the UK despite competitive market pressures.
Group revenue reached £4.79bn, driven by 4.6% sales growth, said the firm. Trading profit rose by 9.4% to £504M, while free cash flow reached £339.9M compared with £283.8 the previous year.
Richmond remained the premier sausage brand in the UK, growing by 5.7% last year, said the firm. Particularly strong growth was achieved in the frozen segment, as the firm launched into tea time protein solutions with its Richmond Mini Meat Balls product.
Wall’s Pastry grew its overall market share, while in the core sub-sector of sausage rolls, the brand grew to become the UK’s premier sausage roll brand.
The growth of the Mattessons brand in the meat snacking sector was a highlight of the year, said the firm. Fridge Raiders achieved double digit growth and in September the firm launched a new innovative meat snack line Double Dippers.
The firm noted Cheestrings volumes were lower due to reduced promotional activity. It added Cheestrings Flavours to the range in May, which it expected will bring new shoppers to the children’s cheese snack category.
‘A mixed performance’
In Ireland, Kerry described its results as “a mixed performance” in a highly competitive marketplace where value offers grew market share. Although the Galtee and Shaws pork product ranges performed well, the Denny brand share was said to suffer from heavily discounted own-label offerings.
In the Irish dairy products sector, Dairygold retained its brand leadership in the spreads sector and recorded 2% value growth. Also, Dairygold Baking Block – launched in 2012 in response to strong growth in homebaking trends – was said to have achieved solid market penetration.
Stan McCarthy, Kerry Group chief executive, said: “The group achieved good underlying growth ahead of our markets in 2013 and a 10.2% increase in adjusted earnings per share. Our performance reflects continued business margin improvement and strong cash generation.
“We are well focused on our targeted nutrition, taste and developing market platforms for growth. Based on current exchange rates, the group expects to achieve 6% to 10% growth in adjusted earnings per share in 2014.”
