Kerry Group sees first half profits rise 7.4%

Revenue for the first six months at the international ingredients and flavours company was unchanged at €3bn. A 3.2% increase in volumes, was offset by 2.2% lower pricing and significant (-3.7%) currency movements relative to first half 2015.

The volume growth was driven by American and Asian markets. Lower volumes were recored in the EMEA region. Raw material costs were back 4% which helped boost margins.

Group trading profit increased by 7.4% to €322m. Adjusted earnings per share increased by 7.5% to 133.8 cent (H1 2015: 124.5 cent). The Group trading profit margin increased by 70 basis points to 10.6%.

The Taste and Nutrition recorded revenues of €2.4bn, with 3.5% growth in volumes and pricing 2.2% lower. Margins increased 70 basis points to 12.8%.

Kerry Consumer Foods’ saw a 2.3% increase in volumes while pricing fell 2.1%. Margins increased 30 basis points to 8.3%.

The group announced an interim dividend of 16.8 cent per share which represents a 12% increase over the 2015 interim dividend.

Commenting on the results Kerry Group Chief Executive Stan McCarthy said; “Despite the challenging market landscape we delivered a solid financial performance in the first half of 2016, with continued margin expansion, strong cash generation and a 7.5% increase in adjusted earnings per share.

The group reiterated its guidance, expecting it to be towards the middle to lower end of the 6% to 10% range of 320 to 332 cent per share.

Impact of Brexit

The group said that while it is too early to quantify the longer term implications of Brexit, it recognises the broader macroeconomic uncertainty caused by the UK vote to leave the European Union.

It said that consumer confidence has weakened as a result of this uncertainty but it “remains confident” that it is “well positioned to address the challenges and opportunities that this decision may present”.