TWO of the country's largest milk and dairy foods combines, Kerry Group and Avonmore Foods, checked in this week with annual results showing satisfactory advances in profitability despite falling global prices for dairy products.

At Kerry Group it was its lucrative food ingredients business which added lustre to annual profitability which, at the pre-tax level, rose 18.6 per cent to £51 million on group turnover up 9.7 per cent to £1.2 billion. Food ingredients, grouped under the banner of holding company Kerry Ingredients, accounting for nearly 72 per cent of group operating profits, increased profits 7 per cent to £65 million.

Managing director Pat O'Neill, commenting on better-than-expected preliminary results, said that even without any enlargement of the asset base pre-tax profits are expected to grow by up to 10 per cent through organic growth in existing businesses. Last year group pre-tax profits rose by 14 per cent to £36.5 million on a turnover improved nearly 8 per cent to £1.3 billion.

Further enhanced cash flows, which rose 19 per cent to £59 million, leave the group well positioned to part-finance its ambitious short-term expansion programme with some acquisitions expected this year.