Irish ingredient giant Kerry savouring rising profits

Kerry, the Irish ingredients and flavours maker, has increased its full-year earnings guidance after a strong first half driven by recent acquisitions and new products sales.

Sales revenue rose to €2.9bn, a 10% gain on the same period of last year, although on a like-for-like basis the growth was a more modest 2.5%.

The profits before tax figure is complicated by so called "non-trading items" which the firm has been forced to take on, like integrating acquisitions into the firm and restructuring costs. After tax, these costs amounted to €59.2m which puts something of a hole in the figures.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

"Adjusted" profit before tax and non-trading items increased by 13.7% to €209m. This is the crucial figure and probably explains why Kerry's shares have risen 4% in morning trading.

The firm is certainly confident enough to have raised the dividend by 10.2% to 10.8 euro cents per share.

Commenting, Kerry's Chief Executive, Stan McCarthy said: "The group is confident of delivering our full-year growth objectives and has revised adjusted earnings per share guidance upwards. We now expect to achieve eight to twelve per cent growth in adjusted earnings per share in 2012".

BS