Solid first-quarter growth at Kerry Group

Kerry Group reported a 3.8% increase in volumes in the first three months of 2017. In a trading update released this morning to coincide with the group’s AGM, which is being held later on Thursday, revenues increased 4.5% reflecting the business volume growth and a 1.3% increase in prices.

The Asia-pacific region was the biggest driver of growth, with volumes up 10.4%. Kerry Group continues to expand in the region to capitalise on the growth opportunities and announced the acquisition of Hangzhou, a China-based flavour manufacturer for the beverages, ice cream, confectionery and snacks sectors in China.

The group saw volumes increase 3.8% across North and South America and, while performance improved in Europe, Middle East and Africa, business volumes increased only 1.9%.

Volumes in its taste and nutrition business increased 4.1%, with margins expanding 20 basis points.

Consumer foods business Kerry Foods reported a 2.3% increase in volumes, but margins fell 70 basis points; the sterling devaluation was a factor here. Kerry said the UK continued to perform well despite the uncertainty surrounding Brexit. The UK remained challenging for sausages, but the Cheestrings brand maintained growth in the market despite operational issues at the Charleville production plant.

The private label spreads category in the UK stabilised during the quarter, according to the statement. However, the Irish spreads market saw a continued decline in volume and value, but its Dairygold brand continued to grow market share.

At the end of March net debt stood at €1.2bn, compared with €1.3bn at year end 2016. The board reiterated its outlook of delivering 5% to 9% growth for 2017.