Kerry warn of "challenging year"

22/05/06 Kerry, the global ingredients, flavours and consumer foods group has warned of a tough upcoming year. Speaking at the Group’s Annual General Meeting Chief Executive Hugh Friel said “Group businesses are performing ahead of last year but energy cost inflation, the weakening dollar and the volatility of raw material prices may impact on the attainment of Group earnings targets for the full year. Against this challenging background we continue to make good operational progress in optimising processing and business support structures and through elimination of non-core activities”. Kerry’s share price fell by as much as 10% following the announcement on Friday but recovered slightly later in the day.

In reviewing the Group’s twentieth year as a public company, Hugh Friel, Chief Executive, said that in 2005 Kerry continued to perform well, delivering good revenue and profit growth in a challenging year for the global food industry. “Sales revenue increased by 7% to €4.43 billion, reflecting like-for-like growth of 4%. Despite significant input cost inflation and a surge in energy costs, trading profit in 2005 increased to €380m, which contributed profit after taxation of €236m and a 7.1% increase in adjusted earnings per share to 131.6 cent,” he added.

Friel said that the Group’s strong nutritional focus, leveraging Kerry’s ingredients, bio-science, flavours and food technology platforms through its broad customer base, augured well for the long-term profitable growth of Group businesses. He also confirmed that the Group continues to explore bolt-on acquisition opportunities, having recently announced the acquisition of two North American food ingredients businesses – Custom Industries and Nuvex Ingredients. Custom Industries, operating from two modern manufacturing facilities located in St. Genevieve, Missouri and Toronto, Canada, is a leading manufacturer of particulates for bakery and ready-to-eat cereal applications and confectionery ingredients for sweet goods. Nuvex Ingredients operates from a state-of-the-art, organically certified, production facility located in Blue Earth, Minnesota, specialising in customised high-protein and fibre nutritional lines for leading manufacturers of breakfast cereals, functional foods and nutritional snacks.