Kerry Consumer Foods Continues To Make Good Progress Despite Downturn
Kerry has reported that over the last four months it has continued the progress and momentum reported in the Interim Management Report for the half year, but overall revenues for the Group were down by 6% compared to the same period last year.
Continuing business volumes on a Group-wide basis again showed a modest improvement and the trading profit margin reflects a 70 basis points improvement relative to the same ten month period of 2008 - driven by on-going efficiency programmes throughout the Group and Kerry Ingredients & Flavours' 'go-to-market' programme.
For the ten month period, continuing business volumes were 3% ahead in ingredients & flavours, back 0.8% in consumer foods and 1.5% ahead on a Group-wide basis. Overall reported revenues were 6% below the same period of 2008 due to the adverse impact of currency changes, lower pricing and elimination of non-core activities associated with business restructuring activities arising from the 'go-to-market' programme.
As reported at the half year, the challenging economic environment - particularly in Ireland - coupled with the depreciation of the sterling/euro exchange rate, adversely impacted reported revenues in Kerry's consumer foods businesses.
However the division continues to make good progress, despite the prevailing market conditions, with underlying business volumes back 0.8% relative to the same period of 2008 and solid margin improvement due to the division's efficiency programmes. In particular the performance of the division's UK business remains very encouraging - compensating for the reported revenue decline in Ireland arising from trading-down and lower pricing, coupled with the contraction of sales from Ireland to the UK market due to currency issues.
In the UK market Richmond again achieved good growth in the sausage sector, Wall's made solid progress in the pastry sector and Mattessons Fridge Raiders continued to grow in the meat snacks segment. In frozen ready meals Kerry's exports from Ireland were adversely impacted by the depreciation of sterling but Kerry's UK based chilled ready meals business performed well.
Overall cheese and spreads performed satisfactorily in the Irish and UK markets. In Ireland good progress was made in integration of the Breeo Foods business acquired at the end of March 2009. Despite the prevailing consumer market issues, the acquired business has performed up to expectations. Market conditions in the Irish added-value meat products sector and the convenience sector remain competitive.
Kerry has reported that over the last four months it has continued the progress and momentum reported in the Interim Management Report for the half year, but overall revenues for the Group were down by 6% compared to the same period last year.