Kerry Group reports solid Q1 performance

Kerry Food Group performed well in the first quarter, despite the horsemeat issue affecting consumer confidence.

Figures showed that the group maintained solid business development and financial performance in the last quarter of 2012, although its consumer food sector did struggle in the period ending 31 march 2013 with a 0.2% decline in sales.

The Group was not affected by the horsemeat issue, but it said the issue affected consumer confidence in some areas of the market, in particular the frozen meals sector.

Kerry Food Group said: “Kerry Foods’ core business segments performed well, notwithstanding the difficult market environment.

“While demand conditions in the Irish and UK consumer foods’ markets broadly stabilised, overall market performance was impacted by the challenges in cost recovery following significant raw material inflation.”

Despite the fall in consumer sales, Kerry Foods reported a 2.2% increase in overall sales volume, which was up 3.1% for the quarter.

“Groupwide performance benefited from improved business efficiencies achieved through Kerry Business Transformation Programmes and successful cost management, mitigating the impact of input cost increases,” the company said.

Business volumes grew by 2.2% and pricing increased by 1.8%, which broadly offset input cost inflation of around 4%, the company said. Revenue was reported to have increased by 0.6% and like-for-like revenue grew by 0.4%.

The company had also implemented some restructuring programmes in order to better its manufacturing footprint prior to the end of Q1. Closing net debt for the company was €1.3bn, up a small amount from the year end position of €1.2bn.

The company said: “The increase reflects the impact of capital expenditure in the quarter and increased investment in working capital,” it said