IRELAND'S LARGEST food company, Kerry Group, will double in size over the next five to six years, its new chief executive Stan McCarthy promised yesterday as he announced a 35 per cent increase in pre-tax profits for 2007.
Kerry overcame soaring raw material and energy costs by passing on price increases and improving its supply chain efficiency, resulting in record earnings before tax and write-offs of €500 million.
Sales grew 6.7 per cent to €4.8 billion on a like-for-like basis (excluding the impact of acquisitions, disposals and currency translation).
Mr McCarthy said Kerry would double revenues to €10 billion through a mix of strong organic growth and acquisitions.
Kerry's global food ingredients and flavours business grew faster than its UK and Ireland consumer foods operation.
Helped by a double-digit growth in the Asia-Pacific region, like-for-like revenues in the ingredients division rose by 7.8 per cent to €3.3 billion, with operating profit of €310 million up 7.6 per cent.
Consumer foods, which now only account for a third of its business, secured sales growth of 5.6 per cent to €1.8 billion, with profit up 6.4 per cent at €119 million, the results showed.
In the US, which accounts for 27 per cent of Kerry's revenues, Mr McCarthy said there was encouraging demand for natural and healthy ingredients in the ready-to-eat cereal and nutrition sectors.
While in Europe, both alcoholic and non-alcoholic beverages are target growth areas.
Kerry's activities in the manufacture of proteins for cell nutrition were also "a rich vein of growth" in 2007, Davy Research noted.
Sales growth of 17 per cent in the Asia-Pacific region, which now accounts for 9 per cent of the business, were "not an aberration", Mr McCarthy said.
The highlights for its consumer foods division included the Denny brand, with Denny rashers outperforming its category, although sausage sales fell slightly.
The Dawn Benefits range of functional fruit juices increased its segment share from 9.9 per cent to 19.2 per cent.
The expanding Freshways sandwich and snack brand took advantage of the Republic's buoyant "food-to-go" market, while the Low Low brand reached the number two position in cheese, behind Charleville, another Kerry-owned brand.
Mr McCarthy said Kerry's performance was "very credible" in a tough business environment.
Analysts agreed, describing Kerry's preliminary statement of results as "upbeat", "very solid" and "comfortable".
