IAWS was treated to a round of analyst upgrades yesterday after delivering profit growth of 17 per cent for the second year in a row.

The food and agribusiness group made a pre-tax profit of €82.2 million in the year ending July 31st, with much of the annual 17 per cent growth drawn from its expanding food operations.

The increase in profits came on turnover of €1.25 billion, which was 3 per cent higher than in 2002.

IAWS pointed out, however, that underlying sales growth had been 7 per cent, when the effects of factors such as currency fluctuations was stripped out. By this measure, turnover in the food division grew by 12 per cent, while like-for-like agribusiness sales were 2 per cent ahead.

A "satisfactory" return in the company's feed business helped to compensate for continuing weak fertiliser sales, but IAWS said management was confident of recording a better fertiliser performance this year.

Mr Philip Lynch, who was presenting results for the last time as group managing director before becoming chairman, said 2002 had been "an excellent year. We remain very confident about our prospects for sustained growth."

Food sales now account for 55 per cent of IAWS turnover and more than 60 per cent of operating profits, which were 11 per cent higher at €94.4 million last year. Joint ventures, including IAWS's Tim Horton operation in Canada, raised their contribution to operating profits over the year from €4.2 million to almost €10 million.

The company decreased its borrowings by €29 million to €155 million last year while spending €91 million on investments, including the purchase of a 22 per cent stake in Swiss-based baker, Hiestand.

Mr Lynch said Hiestand would eventually offer IAWS a "bridgehead" into new markets such as Asia and Eastern Europe and highlighted immediate cross-selling opportunities within the wider group.

He declined to be drawn on suggestions that IAWS may, over the longer term, seek to raise its Hiestand stake to full ownership.

"We'll do that if it's right to do it," he said, adding that the group would never make a hostile approach.

Shares in IAWS gave up some of their recent strength after the results, closing 20 cents lower at €8.70 as sellers sought to cash in accumulated gains.

The company will pay a final dividend of 4.7 cents per share, thus increasing the full-year dividend by 15 per cent to 9.03 cents.