Numico quarterly core profit triples

Dutch food company Numico NV said on Thursday its second-quarter core profit had tripled over the previous year and its share climbed as investors cheered a reorganisation that was bearing fruit.
Numico, Europe's largest baby food maker and a major provider of hospital food, also raised its 2004 sales growth forecast to 7 to 9 percent from 6 to 8 percent and repeated a forecast for growth of about 10 percent in earnings before interest, tax and amortisation (EBITA) from continuing operations.
The news pushed Numico's already buoyant shares up 4.4 percent to 24.71 euros by 0935 GMT.
Numico stock has nearly doubled from a 52-week low hit last August as investors applauded a turnaround laid out by Chief Executive Jan Bennink.
Traders were pleased that Numico, which traces its roots to a Dutch dairy founded more than 100 years ago, was delivering on its promises of sequential growth and steadily making progress toward becoming a high-growth, high-margin business.
"They are not out of the woods yet, but it is clear that the management team is turning the ship around," a Dutch trader said. "Each quarter they are bringing Numico closer and closer toward being the company investors want it to be."
Bennink, who joined the company in May of 2002 after a disastrous foray into the US food supplements business that left it with a crushing debt load, told a briefing that Numico was set firmly on the turnaround path.
"There is still a lot of very hard work that has to be done ... (but) in 18 months we will be humming," Bennink said, adding that he was bullish on both Numico's core businesses - baby food and clinical nutrition.
"The growth in baby food can be sustained like this for another 10 years (and) clinical is really a hidden jewel with great markets and growth opportunities," he said.
Numico, which shed its loss-making food supplement chain GNC last December at a big book loss, said underlying sales had jumped nearly 10 percent in the quarter, providing the impetus to raise its full-year sales target.
That translated into net sales of 435 million, versus 881 million a year ago before a string of divestments, and also trumped the average forecast in a Reuters poll of 13 analysts of 422.16 million euros.
EBITA was 86 million euros, up from 26 million a year earlier and versus a consensus estimate of 84.33 million euros.
"Investors tend to focus more and more on underlying sales growth trends and at Numico that's higher than expected. It was quite a strong statement," a trader at broker Delta Lloyd said.