Bread drives IAWS results
market in the UK, are likely to drive growth for Irish company IAWS
in the second half after a good performance in the first six
months.
IAWS, the Irish company which operates in both the food and agribusiness sectors, has reported pre-tax profits of €27.64 million for the first six months of 2002/03, up 21 per cent on the previous year, helped by strong performances from its US operations and from its worldwide food businesses.
Turnover from continuing operations was up 4 per cent, with underlying sales growth showing a 6 per cent increase taking into account currency fluctuations. Underlying sales growth from food (excluding divestments and foreign currency fluctuations) was 11 per cent in the period, compared with a 0.9 per cent decrease in sales from the nutrition/agribusiness unit.
Operating profits for the period were up 12 per cent from €30.58 million to €34.2 million.
"The group had an excellent performance in the first six months with a 21 per cent increase in pre-tax profits. This growth was driven by our food businesses, which recorded strong first half trading in the US, UK and Ireland. There has been significant growth in the markets for premium food products and IAWS is well positioned to exploit this potential," commented Philip Lynch, group managing director.
The group's domestic food business performed well during the year, driven by the continued success of the Cuisine de France bakery business. The Shamrock Foods business had a satisfactory first six months benefiting from enhanced returns from Roma (Italian food products) and the Shamrock Foods (rice) branded business.
In the UK, IAWS operates under the Cuisine de France and Delice de France names, and both performed well in the first six months. In the retail sector, Cuisine de France had a satisfactory first half, and further growth is expected in the medium term as a result of structural changes in convenience retailing in the British market. The recent acquisition of convenience retail outlets by leading UK retailers (such as T&S by Tesco) will lead to substantial investment in these sites as well as the development of new outlets, Lynch said.
"Symbol groups and remaining independent retailers will be required to reinvest in order to compete effectively within the wider convenience market. This re-positioning reflects the ongoing changes in demographic trends, in particular the growing number of single person households. The group's retail food businesses are well positioned to exploit future growth and development opportunities."
Lynch said that there were significant opportunities for growth in the North American food market. "In particular the US presents a dynamic growth channel for the group. Our North American joint venture with Tim Hortons [in Canada] and the new La Brea bakery in New Jersey are now on stream and additional production capacity will be added in both facilities over the coming year."
The joint venture between IAWS and Tim Hortons is now supplying bread and other baked goods to half of Tim Hortons 2,360 total outlets, he said. Tim Hortons is the largest coffee and baked goods restaurant chain in Canada. The acquisition of the La Brea Bakery, on the other hand, has given the group a major foothold in the fast-growing US artisan bread market. La Brea supplies more than 3,500 retail outlets nationwide.
