Upbeat IAWS sees earnings increase 13%

Earnings at food and agri business group IAWS plc grew by 13 per cent in the year to the end of July, the company said yesterday.

The group's full-year results showed that profits before tax, exceptional charges and goodwill write-offs rose 14.3 per cent to €111.7 million from €97.7 million in 2004.

During the same period, earnings per share (eps) rose 13.4 per cent to 70.41 cent from 62.10 cent last year. The group is recommending a final dividend of 6.052 cent, bringing its total to 11.887 cent, an increase of 13 per cent on last year.

Chief executive Owen Killian also revealed that Wendy's International, its partner in a North American joint venture, bakery chain Tim Horton's, plans to float part of that business on the Canadian stock exchange.

Despite the strong performance and the company's upbeat assessment of its prospects this year, the share price dipped by five cent to close at €11.40 after around 500,000 units changed hands in Dublin yesterday.

Dealers suggested that a note from the company's broker, Davy, leaving its forecasts for this year's performance unchanged, was partly behind the market's reaction.

Analysts John O'Reilly and Barry Gallagher said that they would not alter their prediction of 10.3 per cent growth in eps to 77.7 cent in IAWS' current financial year, with a similar level of expansion in 2006-07.

However, the pair said that the group had achieved "highly impressive" organic sales growth in the food business throughout its markets here, in the UK, Europe and North America.

The results show that the food business was responsible for driving up group turnover in the year to the end of July by 10 per cent to €1.4 billion from €1.27 billion in the previous 12-month period.

Food alone expanded by 22.6 per cent to €892 million. However, nutrition and agri business sales dropped by 4.3 per cent to €563 million.

This was partly due to the sale of its animal protein business for €15.3 million. However, Mr Killian said that sales of fertiliser, animal feeds and fish oils were down.

Operating profit grew 13.7 per cent to €124.1 million from €109 million. Food accounted for €98.9 million - 80 per cent - of that figure, compared with €79.1 million last year.

Its lifestyle foods business, which includes Cuisine de France, Carrolls, Shamrock Foods in Ireland, Delice de France in the UK and La Brea bakery in the US, contributed €73.9 million, an increase of 30 per cent.

The group said that existing businesses contributed 17 per cent of this growth and its French acquisition, Groupe Hubert, contributed 13 per cent. It generated profits of €7.4 million during the period.

Its associates and joint ventures, Hiestand in the UK, Switzerland and Germany, and Hortons in the US and Canada, contributed €25 million to operating profits, 13 per cent up on 2004.

The group spent €110 million on acquisitions during the period and invested €63 million in facilities in the US and Europe.