Kerry Group's results were complicated by a €200m (£158m) charge the food producer is taking to re-organise its manufacturing base over the next two years. However, the consumer food group's underlying performance continues to look solid in the face of constrained retail markets in developed economies, although a forward PE ratio of 15 for 2013 leaves the good news factored in.
Strip out €74m of exceptional charges and trading profits rose almost 13 per cent to €241m, prompting management's to raised full-year guidance for EPS growth to between 8 to 12 per cent, compared to 7-10 per cent previously. This implies adjusted EPS of between 230¢ to 238¢ and brokers expect the positive earnings story to continue next year with Cannacord Equity forecasting EPS of 252¢ in 2013.
The performance of Kerry's key ingredients and flavours division was key. Acquisitions and a good performance in cereals and beverages helped offset mixed markets for savoury, dairy and culinary items, particularly in Europe; revenues were 14 per cent higher at €2.1bn, including 3.7 per cent like-for-like growth, which produced trading profit of €213m, up 17 per cent. That performance was essential as the consumer foods division faced moribund UK and Ireland markets. Sales and profits both edged up under 2 per cent to €881m and €64m, respectively, with segments of the market, particularly cooked meats, facing intense competition.
KERRY (KYGA) | ||||
|---|---|---|---|---|
| ORD PRICE: | €37.90 | MARKET VALUE: | € 6.66bn | |
| TOUCH: | €37.83-37.90 | 12-MONTH HIGH: | €37.90 | LOW: €23.64 |
| DIVIDEND YIELD: | 0.9c | PE RATIO: | 20 | |
| NET ASSET VALUE: | 1093¢* | NET DEBT: | 70% | |
| Half-year to 30 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Net div per share (¢) |
|---|---|---|---|---|
| 2011 | 2.65 | 175 | 82.2 | 9.8 |
| 2012 | 2.91 | 127 | 61.3 | 10.8 |
| % change | +10 | -27 | -25 | +10 |
Ex-div:17 Oct Payment:16 Nov *Includes intangible assets of €2.35bn, or 134¢ a share | ||||
