Kerry Group has reported double-digit growth in its trading profits for the first half of 2019, as consumer trends continue to evolve at pace.

Announcing half-year results on Thursday, Kerry’s trading profits for the first six months of 2019 grew by 13% year on year to €383m, as margins in the business widened slightly to a very strong 10.7%.

Revenue

Kerry’s revenue for the period also saw double-digit growth, with half-year sales rising 11% year on year to just under €3.6bn.

Kerry attributed the strong growth in turnover to volume growth of 3.3%, favourable currency movements of 2.7%, along with a 4.7% contribution to sales from recent acquisitions. The company said prices were neutral for the period.

The group’s debt to earnings (EBITDA) ratio is modest at 1.9 times

Kerry’s operating profit for the period rose 6% to €311m, despite operating profit margins narrowing from 9.1% last year to 8.7% in the first half of 2019.

Kerry’s net debt position rose by €295m in the last six months to €1.9bn as a result of recent acquisitions.

However, the group’s debt to earnings (EBITDA) ratio is modest at 1.9 times.

Kerry Group chief executive Edmond Scanlon said the company continued to deliver volume growth ahead of the market despite increased uncertainty and higher prices for consumers.

Enhancement

“We are excited by the ongoing enhancement of our product mix and the development of our innovation pipeline. Good progress has been made on the integration of recent acquisitions, which are performing very well,” said Scanlon.

Kerry narrowed its profit guidance and now expects to achieve full-year adjusted earnings per share (EPS) growth of 7% to 9%. It had previously issued a wider guidance for adjusted EPS growth of 6% to 10%.

The company also announced it was increasing its half year dividend pay-out by 12% to 23.5cent per share.

By division

Taste and nutrition

Kerry’s taste and nutrition division remains the driving force in the group’s overall business and delivered sales growth of 13% in the period to more than €2.9bn.

Trading profits in the division rose by 15% to €388m, as profit margins widened to 13.3%.

Kerry said its taste and nutrition business continues to outperform the market and delivered sales volume growth of almost 4% in the period.

This was driven by strong demand from its customers in meat, snacking and beverages.

Consumer foods

Kerry’s consumer foods division reported sales growth of 1% in the first half of the year to €689m.

Trading profits in the division were stable at €48m, while profit margins held firm at 7%.

Kerry’s consumer foods business is heavily exposed to Brexit and the company has invested heavily to restructure the division over recent years.

Kerry said the market landscape facing its consumer foods business continued to be challenged in the first half of 2019.

Lower consumer confidence was reflected through a more cautious consumer, while changes at supermarket level continue to drive change along the end-to-end supply chain.