Forecasts for profits and earnings per share at Kerry Group have been increased substantially after the group beat market expectations for its 1999 results with a 25 per cent increase in pre-tax profits to #149.2 million (#117.5 million) and a 20.5 per cent increase in earnings per share to 73.6 cents (57.96p).

The consensus earnings forecast for 1999 had been 71.5 cents and Kerry's shareholders, who include 6,000 members of Kerry Co-Op, have been rewarded with a 20 per cent increase in the final dividend to 5.33 cents per share, bringing the total pay-out to 7.87 cents.

Analysts have now revised their 2000 earnings forecast to around 85 cents and the 2001 forecast to around 97 cents, but concede that these forecasts are conservative and based on 15 per cent earnings growth, the minimum the company has set itself.

Sales were up 11.7 per cent to #2.5 billion (£1.97 billion). One key element in the 1999 results was the sharp improvements in operating margins from 7.9 per cent to 8.3 per cent, with particularly strong growth in margins in the Americas, the rest of Europe and the Asia Pacific region.

Margins from the Irish operations were virtually unchanged at 5.6 per cent but this includes the Irish milk processing operations which generate negligible profits. Once these are stripped out, margins in the Irish ingredients and consumer foods are close to the 8.4 per cent average.

Chief executive Mr Denis Brosnan said Kerry's attitude to its Irish dairy business was that it did not want to lose money but also did not see great merit in going for big profits at the expense of Kerry's milk suppliers, most of which are both shareholders in the plc and in the co-op, which controls 36 per cent of Kerry Group shares.

He added that Kerry's objective was to boost its operating margins into double figures but that would depend on the pace of acquisitions over the next few years.

In Ireland, sales rose to #614 million from #587 million with operating profits up to #34.5 million from #32.3 million. In the rest of Europe, which takes in the consumer foods business in Britain and ingredients businesses in Britain and on the continent, sales were up to #1.09 billion from #966 million with operating profits rising to #85.8 million from #72 million.

In the Americas, which generates the highest margins for Kerry - more than 12 per cent - sales increased to #615 million from #580 million with operating profits up to #76.3 million from #66.7 million. The strongest growth came in the Asia-Pacific region, where sales and operating profits more than doubled to #135 million and #7 million respectively.