No horseplay at Kerry

The ingredients and flavours business remains the profit engine of the group, contributing 79 per cent of trading profits and all of the organic growth in 2012. That's thanks to a focus on healthy products and convenient packaging - both major trends in the food industry - as well as on emerging markets. Like-for-like growth was sound in North America (3.2 per cent), impressive in the Asia-Pacific region (9.5 per cent) and weak in greater Europe (0.5 per cent).

Meanwhile, the once core consumer-facing foods business, which operates exclusively in Ireland and the UK, continued to struggle. Like-for-like sales in the consumer division fell 1.5 per cent and trading margins were down by 20 basis points due to intense competition among retailers. Some suppliers have clearly responded by compromising the quality of their ingredients, but director of corporate affairs Frank Hayes says Kerry's frozen and processed product lines have all tested negative to horse DNA.

On a group basis, margins rose, thanks to volume growth and an ongoing factory and back-office rationalisation project. And cash generation is as robust as ever, so net debt fell despite six acquisitions costing €177m in total.

Based on management guidance of 7-11 per cent earnings growth, broker Goodbody expects adjusted EPS to rise to 259¢ this year.