Developing markets help Kerry Q1 results
Ingredients and food company Kerry Group has reported encouraging first-quarter results, with reported sales revenue up by 9.7% and like-for-like growth of 3.8%, with volumes up by 1.7%.
Underlying business margins also increased compared to the same period last year, although the net debt position also increased from €1.4bn, from €1.3bn, reflecting the impact of capital expenditure and increased investment in working capital.
The company said it continued to perform satisfactorily in the first quarter of 2012 and continued to invest in capabilities and positioning for the future. It said: “Developing markets continued to provide good opportunities for growth and business development. Performance in the first quarter also benefited from the impact of group acquisitions completed in 2011.”
Kerry Foods, the consumer food division, said it achieved an encouraging business performance despite the challenging conditions in the Irish and UK consumer foods markets. Revenue increased by 0.6%, reflecting 1.5% like-for-like growth, with business volumes up by 0.6%.
Sausage brand Richmond achieved excellent growth, while there was solid business performance in the UK chilled ready meals sector and, in Ireland, Denny benefited from the launch of 100% Natural Ingredients Denny Deli Style ham. The company confirmed that, following the acquisition of Headland Foods in 2011 and in response to continuing challenging market conditions, its frozen meals business unit is undergoing restructuring of its manufacturing base. In February it announced the closure of its frozen factory in Grimsby.
Earlier this month, Kerry Foods also revealed plans to close its cooked meat plant in Durham.
The ingredients and flavours business increased by 13.8%, reflecting a 4.9% like-for-like growth. It said that while functional ingredients achieved good growth, performance in the mainland European meat industry was impacted by challenging sectoral market conditions. Coating systems maintained solid growth in the meat sector, through retail and foodservice applications across the Americas, while increased demand for authentic ethnic marinades and dressings helped meat technologies outperform growth rates in Asia-Pacific markets, notably in Australia and New Zealand.
The group said it would continue to integrate the acquisitions completed in 2011, which are performing in line with expectations and would optimise manufacturing, scale and efficiency benefits.