Kerry Group has reported a 7 per cent increase in sales, operating profit and earnings per share for last year and has forecast similar growth for 2006.
The results, which were in line with market expectations, were due to what Kerry described as "a solid business performance . . . in a challenging year for the global food industry".
The Tralee-based company, whose brands include houshold names like Denny sausages and EasiSingles cheese, was hit by a number of issues, including higher energy prices, which cost the company €24 million.
It also suffered from a negative foreign exchange impact, which also cost it €24 million, although the company said it managed to claw back around half of those costs in the marketplace.
The company's consumer foods division felt the impact of a 15 per cent downturn in the market for frozen and chilled ready meals, static food prices and further retail consolidation in both Ireland and Britain.
Nonetheless, the business managed to notch up sales of €1.7 billion, a 4 per cent increase.
Trading profits also rose by 4 per cent to €123 million. This represented a trading margin of 7.1 per cent, unchanged from 2004.
Turnover in the larger food ingredients business rose by 9 per cent to €3 billion as trading profits increased by 9 per cent to €284 million. Margins in this division were also flat at 9.4 per cent.
In Europe, ingredients sales rose by 9 per cent to €1.26 billion, in the United States they were up by 8 per cent to €1.2 billion while in the Asia Pacific market, sales grew by 16 per cent to €332 million.
Overall, the company reported a 7 per cent rise in sales to €4.4 billion while operating profit was up by 7 per cent to €380 million.
Kerry has announced a final dividend of 11 cent per share, a 16 per cent increase, bringing the total dividend to 16 cent.
Shares in the company lost nine cent yesterday to €18.56 in a generally weaker Irish market.
The company, which reported growth of 7 per cent in adjusted earnings per share to 131.6 cent, expects a similar performance again this year. Some analysts see this as conservative, however.
"We see this as a base case with potential upside as the year progresses arising from increasingly favourable foreign exchange rates, accelerating research and development activity and benefits from the level of restructuring carried out in 2005," NCB Stockbrokers said yesterday.
Kerry said its balance sheet remained strong with net debt at year-end of €1.3 billion.
Expenditure on research and development increased to €125 million last year from €111 million in 2004 while the group spent €234 million on acquisitions.
