The market value of Kerry Group soared to an all-time high of €19.4 billion on Thursday as it reported better-than-expected earnings for the first half, cementing its position as the second-largest company on the Dublin stock market.
Meanwhile, group chief executive Edmond Scanlon refused to rule the global nutrition group out of the running for US speciality chemicals group DuPont de Nemours' food additives and ingredients business, which has been put on the market with a mooted price tag of $20 billion (€17.9 billion).
Kerry’s adjusted earnings per share (EPS) rose 8.4 per cent in the first half of the year to €1.64, beating market expectations by 4 cents. The food giant said it now expects to post 7-9 per cent growth in EPS this year, having previously guided towards 6-10 per cent expansion.
Shares in the company jumped as much as 6 per cent during trading in Dublin to an all-time high of €1.099, leaving it second only to CRH as the most valuable company on the Iseq.
While Bloomberg reported on Wednesday that Kerry would be among logical partners for the ingredients business that DuPont is selling, such a deal would be a significant departure from the Irish company’s gradual growth through more than 200 bolt-on deals over the past 25 years.
“There isn’t a transaction in the industry that our name isn’t associated with,” Kerry chief executive Edmond Scanlon told reporters at a press briefing, saying that the company doesn’t comment on mergers and acquisitions (M&A) speculation.
“But I think it’s important to recognise that [M&A] is an important part of our business. We don’t rule anything in or out.”
Taste and nutrition
Sales in Kerry’s main taste and nutrition business, which sells ingredients to beverages, confectionary and culinary food companies, grew by 3.8 per cent during the first six months of the year to €2.915 billion, while trading margins in this area widened to 13.3 per cent.
Sales in consumer foods, where brands include Dairygold, Denny, and EasiSingles cheese slices, edged 0.6 per cent higher to €689 million, though its trading margin remained flat at 7 per cent.
On a group basis, sales expanded 10.7 per cent, comprised of 3.3 per cent volume growth, a 2.7 per cent boost from currency translations and 4.7 per cent bump from acquisitions.
“While heightened consumer pricing and uncertainty impacted market volume growth rates in some developed markets, our unique and industry-leading business model and integrated taste and nutrition positioning continued to deliver significant value for our customers in meeting rapidly evolving consumer needs,” said Mr Scanlon.
During the period, the group completed three acquisitions at a total cost of €327.2 million, including natural seasons maker Ariake USA, and Southeastern Mills’ North American coatings and seasonings business.
