Kerry reports 10.8% increase in 2011 pre-tax profits

Ireland-based food ingredients and flavours group Kerry has reported adjusted earnings of €449.1m for the year ended 31 December 2011, up 10.8% from €405.4m in 2010.

Despite weak consumer confidence, revenue climbed 6.4% to €5.3bn, driven mainly by its ingredients and flavours segments which contributed to two-thirds of total sales.

In a preliminary trading statement, the company said that its trading profit reached a milestone level of €501m, up 7% from 2010.

Kerry chief executive Stan McCarthy said that the company delivered strong profitable growth in 2011 in many markets despite significant raw material and input cost inflation.

"The Group performed well across developed and developing markets while continuing to build our capabilities and positioning for the future," McCarthy added.

The ingredients and flavours business, which offers ingredients for food, beverage and pharmaceutical markets, grew steadily in all regions, with revenue up 7.7% to €3.7bn, and trading profits up 9.4% to €439m.

The consumer foods business, which offers added-value branded and customer branded chilled foods, saw a 3.2% increase in revenue to €1.6bn, and a marginal increase of 1% in trading profits to €130m.

The company said consumer foods markets in Ireland and the UK proved challenging due to tough economic environment and the level of price promotional activity in both markets.

During the year, the company increased its investment in research and development to €167m, up from €156m in 2010 and capital expenditure totalled €162m, up from €139m in 2010.

The company completed a number of acquisitions in 2011, of which, the most significant was the acquisition of Cargill’s global flavours business for $230m.

McCarthy said the company is confident of achieving its strategic growth objectives for 2012 and expects to achieve 7% to 10% growth in adjusted earnings per share.