Irish food group IAWS today posted a 20 per cent rise in first half pre-tax profit and announced a joint venture deal to supply bread to Canada's largest coffee and doughnut shop chain, Tim Hortons.
The company's shares took heart from the news and upbeat comments on prospects for the full year. There has been a satisfactory start to the second half of the year and the board is confident of another good result for the full year, IAWS said in a statement.
IAWS, which services the consumer foods and animal feeds and fertilizer sectors, reported pre-tax profit of euro 18.24 million, with turnover up 12 per cent to euro 496 million. Adjusted earnings per share rose 17 per cent to euro 11.53 cents.
IAWS said it had formed a 50/50 joint venture with Canadian restaurant chain Tim Hortons - a subsidiary of Wendy's International Inc - helping to push the firm's shares up nine per cent to euro 7.60 on the Dublin stock exchange. In London, the shares had jumped 11.31 percent to 467.5p sterling by 13.40 p.m.
The joint venture will develop a euro 75 million specialty bakery in Ontario, which will supply par-baked goods to the Hortons chain in North America as well as to IAWS' Cuisine de France outlets in the United States.
As additional baking capacity was needed and more production lines were added, the total joint venture investment could reach euro 225 million, split between IAWS and Tim Hortons, IAWS said. Delivery of product from the plant will begin next year.
(The deal) gives us a manufacturing base in North America and allows us to unlock the full potential from the Cuisine de France concept there, IAWS chief executive Mr Philip Lynch said.
Hortons, founded in 1964, operates some 1,900 stores in Canada and has 115 locations in the US. The chain was merged with Wendy's -- one of the world's largest restaurant operating and franchising companies -- in 1995.