The Ireland-headquartered company is set to report on its full year results for 2011 on 21 February.
Despite predicting a tough year for the Irish firm due to weak consumer demand in the UK and Ireland retail sector, Darren Greenfield, a broker with Irish investment house, NCB Stockbrokers, said ingredients and flavours will deliver for Kerry arising out of strong growth in the Americas and Asia-Pacific.
The food industry specialist, in a note this week, also reckons that current euro currency weakness will benefit Kerry. “We estimate that a 5% weakening in the Euro could boost earnings by around 3%,” said Greenfield.
And the NCB broker stressed that he expects currency tailwinds, acquisitions and emerging market growth to enable Kerry to deliver mid-to-high single digit earnings per share (EPS) growth in the coming financial year.
For 2011, the analysts are expecting €5.3bn of revenues, and €490m in earnings before interest, taxes and amortization (EBITA).
Furthermore, assuming no further acquisitions were completed in Q4, NCB’s predictions for year-end net debt for Kerry is €1.15bn, said Greenfield.
But the market specialist said that with over "€1bn headroom we expect Kerry to continue its current ingredients and flavours acquisition strategy in 2012."
Ready meals sector challenges
Meanwhile, Kerry confirmed this week that 337 jobs could be cut at a UK factory as a result of increasing competition and tumbling sales in the ready meals market.
The firm said that it had begun a 90-day consultation with staff at its Europarc plant in Grimsby but stressed that unless a solution was found to end falling sales, production at the site will be stopped.
Kerry blamed increased competition in the market, which has resulted in reduced sales across most of the business’ major accounts.
Frank Hayes, director of corporate affairs at Kerry Group, told sister site FoodManufacture.co.uk: “We have commissioned a review of the frozen ready meals business. We have made every effort to reduce the cost base and add additional business but regrettably we have not been able to restore profitability to the plant.
“Our plan is to conduct a review of the site. If we cannot identify measures to secure production we will have no option but to end production.”
Production at the site, according to Hayes,would be transferred to Kerry’s factory in Monaghan, Ireland.