IAWS sees operating profits rise 43%

CUISINE DE FRANCE owner IAWS overcame challenging trading conditions to secure a 43 per cent rise in operating profits in the six months to the end of January.

A "very strong" performance by agri-business group Origin, in which IAWS has a 71 per cent stake, as well as good consumer demand for its baked goods in both Europe and North America, helped group sales expand 34.5 per cent to €1.12 billion.

The Food North America division, which comprises sweet-baked goods maker Otis Spunkmeyer and artisan bakery La Brea, posted stronger revenue and operating profit growth than the European business, with sales growing 58 per cent to €229 million and operating profit up 87 per cent at €27.2 million for the six-month period.

In Europe, where IAWS owns Delice de France (the foodservice equivalent of Cuisine de France) and Carroll Cuisine, sales grew 11 per cent to €351 million, generating profits of €34.7 million.

IAWS said its convenience food offerings had become "an essential component of consumer spending" due to increasingly time-poor, commuting-heavy modern lifestyles.

IAWS increased its dividend for the first half of its financial year by 15 per cent to 8.6 cent.

The stock gained 31 cent to close at €13.76 on the Iseq yesterday, a climb of approximately 2.3 per cent.

The company's net debt stands at €418 million, while the food group invested an additional €100 million in a €200 million Dublin plant to give it extra sales capacity.

The plant is expected to be fully operational by the end of the year.

IAWS chief executive Owen Killian said the company did not have any major acquisitions in mind.

"We are living in strange times vis-à-vis the availability of credit. Rushing into acquisitions might not be a good idea.

"Sellers' expectations don't change overnight, but over time we should be able to get some value," Mr Killian said.