WITH interest rates at last on the move, the superior set of half year trading results this week from the Kerry Group must be clouded by the group's whopping £372 million debt millstone. Even a quarter of one percentage point increase in the cost of servicing debt will eat into capital resources, making the objective of trimming the debt fat to £328 million by the end of the year that more difficult and costly.
Kerry, the Republic's largest food grouping, has what was termed a "very satisfactory" six month's trading with solid growth in its three main areas of operation, ingredients, food and agriculture.
Group turnover rose 9 per cent to £589 million producing operating profits of £40.2 million (£37.2 million) and a 21 per cent improvement in pre tax profits to £20 million.
The ingredients side, swelled by acquisitions, is the hub of the operation, accounting for 55 per cent of turnover, generating higher operating profits of £29.4 million on a £32 million advance in turnover to £332 million.
Kerry has intimated that its priority now is to consolidate recent acquisitions, like the recently acquired Ciprial fruit business and DCA, its US based ingredients company. With resources now more focused, analysts expect annual earnings to show a steady improvement on last year.
