See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Finfacts is Ireland's leading business information site and
you are in its business news section.
the international food ingredients group, today reported pre-tax profits of
€175.2m for the half year to the end of June, up 8% from the same period last
Underlying sales climbed by 8.4% to €2.6bn and adjusted earnings per share rose
by 9.7% to 86.8 cent.
The interim dividend has been increased by 11.4% to 9.8 cent.
the results Kerry Group chief executive Stan McCarthy said: "Kerry delivered
a solid earnings performance and strong volume growth in the first half of 2011,
despite significant raw material and input cost inflation. The Group remains
confident of achieving its growth targets for the full year and delivering eight
to twelve per cent growth in adjusted earnings per share as guided at the
beginning of the year."
Liam Igoe, analyst at Goodbody, commented:
"While Kerry’s Ifs growth slowed into Q2, it remained robust and, combined with
a lower than forecast finance charge, means that Kerry’s eps (earnings per share) was ahead of our
forecasts (86.8c versus 86.1c forecast). H1 lfl growth of 8.4%, of which 3.6% is
volume related, compares with 10.5% in Q1 (of which 4.1% was volume related).
This implies lower lfls in Q2 of approximately 6.6% (of which 3.1% is volume
In terms of the key volume metric, the
biggest growth was within ingredients (+9.6%), though lfl volumes were lower in
Q2. Margins were weaker yoy, as the company had previously indicated, due to a
combination of lagged cost inflation issues, the costs associated with its
ongoing 'Kerryconnect' programme and the arithmetical effect of increasing
prices on the sales line. In spite of the margin pressures arising from
increased cost inflation and weaker currencies, Kerry has maintained its 8-12%
eps growth guidance for FY11. At first glance, we are likely to slightly
increase our current projections (+9%), due to lower than anticipated interest
charges in H1.
The market-related fall in Kerry’s share price in
recent weeks leaves its current 2012 PER at less than 10x, very much at the
lower end of its historic range. Re-affirmation of growth projections today
should serve to reignite interest in this defensive growth stock."
Dell Computer on Tuesday reported net
profit of about $890m, or 48 cents a share, in its latest quarter - - a 63% jump
from a year earlier. Excluding once-off items, Dell earned 54 cents a share.
The second-biggest PC maker posted revenues that missed analysts' estimates, as
it was hit by slowing spending on desktop PCs and consumer technology.
Second-quarter sales rose less than 1% to $15.7bn, Dell said. The company cut its full-year revenue growth estimate to a range of 1% to
5%, from 5-9% previously, citing uncertainty about public sector and company
spending on technology.
US job creation:
Economic View: Little progress at the
Franco-German summit; Dermot O'Leary, chief economist at Goodbody, comments
-- "We were right to have low expectations for
yesterday’s meeting of the leaders of the euro-zone’s two largest economies.
Statements following the Merkel/Sarkozy meeting were big on rhetoric around
support for the euro but details were sparse and simply provide a bridge to full
agreement of the July 21 proposals at national parliaments. That, of course, is
if the markets give them that time. Among the proposals are a twice-yearly
meeting of euro leaders, chaired by Herman van Rompuy. With these summits
already taking place, this announcement is hardly ground-breaking. The joint
statement between France and Germany also called for closer economic ties
between countries within the bloc, but it stopped short of proposing the
introduction of Eurobonds. This, for the French and Germans, is putting the cart
before the horse. The strategy now seems to be to dangle the notion of Eurobonds
out in front of troubled euro nations as a carrot for continued compliance with
fiscal discipline dictated by the two.
To this end, France and Germany agreed to take the
lead on closer fiscal coordination by: (1) enshrining a debt brake in their
respective national constitutions and push for similar throughout the euro-zone,
and; (2) harmonising their corporation tax rates and bases. Ireland would have
suspected that the corporation tax issue had fallen away following the agreement
made at the July 21 summit, but it has now reared its head again less
than a month later. On the former issue, Ireland and, indeed, Greece and
Portugal, are all unlikely to have major problems with enshrining a debt brake
into their national constitutions, given that these countries have little
control over fiscal policy at this stage in any case.
Yesterday’s statements will do little to calm
market’s nerves on the region, as the major issues remain the same. Firstly,
solvency concerns will remain, and will be exacerbated by the signs of economic
slowdown in the region. Second, the EFSF still does not have the firepower that
it needs and judging by Sarkozy’s comments yesterday, increasing its size is not
on the table. Thirdly, while German and French proposals carry significant
influence, the challenge of navigating through 17 national parliaments still
Franco-German proposals outline the future shape of European integration:
Irish corporate tax rates could suffer; Barry Dixon of Davy, comments - -"The
old adage of 'what does not kill you makes you stronger' could be applied to the
latest developments on resolving the eurozone debt crisis. In the face of a
clear threat to the future of the single currency, the French and German leaders
have pledged their support for the euro. While the proposal does not include the
issuance of eurobonds, President Sarkozy's comment that this would be more
appropriate 'at the end of the integration process rather than the beginning' is
interesting. It suggests that the eurozone area is at the start of the process
of economic integration with fiscal integration the next logical step. As part
of this process, the proposal includes a recommendation for the harmonisation of
the corporate tax rate as well as a balanced-budget commitment enshrined in the
constitutions of all member states.
For Ireland, the most significant implication of the proposals is the
potential loss of the 12.5% corporate tax rate. While this on the face of it
could be bad news for FDI and job creation, in a more federal structure, the
Irish government would have to become more innovative in terms of providing
incentives/support to companies wishing to set up operations in Ireland.
The willingness of the core eurozone economies to support the periphery
may be lessened by slowing growth within these economies. Latest eurozone GDP
figures indicate that growth slowed sharply in Q2 with 0.2% growth reported for
the period across the region. The slowdown in core Europe is of most concern
with French GDP unchanged and German growth of 0.1%, well below the numbers
reported for Q1. On a positive front, any thoughts by the ECB for a further
interest rate rise must now be well and truly banished."
On Tuesday in New York, the Dow
fell 77 points, or 0.67, to 11,406.
After three consecutive days of gains, the Dow is up 7.1%, its biggest such move
since March 2009, when markets were pulling out of their financial-crisis nadir.
The Nasdaq Composite slid 1.24% and the S&P 500 slipped 0.97%.
The MSCI Asia
Pacific Index gained 0.2% Wednesday.
Nikkei 225 dipped 0.55%; China's Shanghai Composite index fell 0.26%;
Australia's S&P/ASX 200 rose 1.33% and the Bombay Stock Exchange's Sensex
index climbed 0.03% in Mumbai.
The margin between the US
benchmark WTI (West Texas Intermediate) used on the New York Mercantile Exchange
and Brent is over $22.
The US Energy department
recently said that growing volumes of Canadian crude oil imported into the
United States contributed to record-high
levels at Cushing, Oklahoma of over 41m barrels at the end of March 2011
(86% of working capacity at Cushing), and a price discount for WTI compared with
similar-quality world crudes such as Brent. A discount for WTI is expected to
persist until transportation bottlenecks impacting the movement of mid-continent
crude oil to the Gulf coast are relieved. Consequently, the projected US refiner
average acquisition cost of crude oil, which was about $2.70 per barrel below
WTI in 2010, is $1.60 per barrel above WTI in 2011 and $1.10 per barrel above
WTI in 2012.