Kerry delivers “solid” H1 with 6% profit hike to €214m

16-Aug-2011 - Last updated on 17-Aug-2011 at 13:07 GMT

Profits are up 6.1% at Kerry for H1, "despite significant raw material and input cost inflation"

Irish dairy and ingredients group Kerry has turned in a”solid” first half of 2011 that saw it increase volumes, weather raw material price hikes, and see success in a “go-to-market” functional ingredient strategy as profits jumped 6.1% on 2010 figures.

Kerry notched trading profits of €214m for the first half of the year, with sales jumping 8.4% to €2.6bn, figures the company said were on track to meet its yearly forecasts.

Kerry representatives were not available for further comment but chief executive Stan McCarthy observed in a statement: “Kerry delivered a solid earnings performance and strong volume growth in the first half of 2011, despite significant raw material and input cost inflation. The Group remains confident of achieving its growth targets for the full year and delivering eight to twelve per cent growth in adjusted earnings per share as guided at the beginning of the year.”

The company said it had engaged in group cost recovery which had “proved highly effective” and that it would continue to engage in pricing alterations where inflationary raw material pricing trends continue but in, “collaboration with customers.”

Raw material costs jumped 11% compared to the first half of 2010.

It said its ingredients and flavours businesses had grown ahead of market in all regions due to, “successful layering of Group technologies and focused end-use-market innovation.”

“While the Irish and UK consumer foods markets remain highly competitive with heavy promotional activity which delayed input cost recovery, Kerry’s leading brands maintained good growth in the UK market and stabilised market shares in Ireland,” it said.

Healthy eating

It said healthy eating and clean-label trends boosted its bottom line.

“Food and beverage consumption trends continue to increase demand for reduced calorie, reduced salt, all-natural solutions and clean product labelling – providing increased opportunities for Kerry to capitalise on its global leadership in development and delivery of consumer preferred taste solutions.”

Functional ingredients grew in all markets it said, praising the response to its “go-to-market” strategy with enzymes and emulsifiers.

It said all its divisions from Savoury & Dairy, Beverage Systems, Sweet and Cereal & Sweet technologies had been forced to deal with the impact of rising costs.

Its pharmaceutical division was also performing well in the US and BRIC countries.

Frank Hayes, director of corporate affairs, got in touch after publication to add that inflationary price pressure would be an ongoing issue through the rest of the year, but its' collaboration policy was ensuring clients weren't alienated from the process.