If you look at the table below, it appears Kerry Group (KYGA) reported an eye-watering surge in earnings last year. But dig a little deeper and you'll find the increase was down to a number of exceptional items that flattered the ingredient giant's performance in 2013. Strip these out and the growth looks modest yet respectable given the challenging macroeconomic backdrop in many of Kerry's key markets.
Adjusted trading profit rose 4 per cent to €636m, while volumes inched up 2.4 per cent. Changes in demographics and consumer behaviour are boosting demand for convenience foods and health and wellness products globally. These are areas in which Kerry operates through its ingredients and flavours division, which posted 6 per cent growth in trading profits to €593m last year.
Meanwhile, a group-wide restructuring programme and overhaul of the weaker consumer foods business resulted in a 60 basis point margin improvement to 11.1 per cent. Kerry also made a number of business disposals. That will weigh on earnings this year, but margins should improve significantly as a result.
Investec expects pre-tax profit of €605m for the current financial year, giving EPS of 306¢, up from €550m and 277¢ in full year 2014.
| KERRY (KYGA) | ||||
|---|---|---|---|---|
| ORD PRICE: | €63.69 | MARKET VALUE: | €11.2bn | |
| TOUCH: | €63.62-€63.72 | 12-MONTH HIGH: | €65.96 | LOW: €49.30 |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 23 | |
| NET ASSET VALUE: | €12.72* | NET DEBT: | 53% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 4.96 | 393 | 185 | 28.8 |
| 2011 | 5.30 | 433 | 206 | 32.2 |
| 2012 | 5.85 | 316 | 148 | 35.8 |
| 2013 | 5.84 | 122 | 48 | 40 |
| 2014 | 5.76 | 556 | 273 | 45 |
| % change | -1 | +356 | +469 | +13 |
Ex-div: 9 Apr Payment: 15 May *Includes intangible assets of €2.63bn or €14.95 a share £1=€1.36 | ||||
