Glanbia enjoyed a fine start to 2008 according to its half-yearly financial report, much to the satisfaction of the plc’s Managing Director John Moloney.
“We had a good first half delivering strong growth relative to the first half of 2007 and a 26 per cent increase in adjusted earnings per share,” according to Mr Moloney.
“Margins have recovered in Consumer Foods Ireland and there is a satisfactory outlook for Agribusiness and Property (two branches of the plc’s business).”
The main points of the report included:
* A revenue increase of 6.3 per cent, with like-for-like revenue up 20 per cent
* Profit before tax pre exceptional was up 37.6 per cent
* Like-for-like profit before tax exceptional was up 49 per cent
* There was a 10 per cent increase in dividend per share
* Food Ingredients USA and Nutritionals delivered strong results
* Improved performances from Glanbia’s international joint ventures, while
* All other divisions performed broadly in line with company expectations
“For the full year, we are confident of a good overall performance and we believe the Group will deliver double digit earnings growth, in line with market expectations,” said Mr Moloney.
Regarding the Irish food sector, the Glanbia report described it as “very competitive with changing trends in consumer demand driven partly by the current downturn in the economy.”
The report reads: “We expect this business to sustain its improved performance for the second half [of 2008], delivering an overall satisfactory performance for the year.”
From the international perspective, the Glanbia report details that the volatility in global dairy markets has continued into the second half of the year.
“This is creating a time lag in balancing milk input costs with market returns. This timing issue, combined with increased energy costs, is leading to a reduction in the expected performance of Food Ingredients Ireland in the second half of the year compared to the corresponding period last year.
“As a consequence, overall results for Food Ingredients Ireland for the full year will be lower than 2007.”
In terms of its US operations, milk production to date at its Idaho facility continues to grow.
“Domestic and export demand for American style cheddar, where Glanbia is the number one producer, remains strong. In his market context, Food Ingredients USA is expected to deliver a good full year performance.”
Southwest Cheese, a Glanbia joint venture in New Mexico, is one of the world’s largest natural cheese and whey-processing plants.
“This business, now operating at full capacity, is performing well and we had a very strong first half in 2008 leading to a significantly improved performance and a good outlook for the full year,” states the report.
Nutricima, branded for the Nigerian market, “continues to make good progress in developing its market and brand positioning and the current expansion of the facility is on target for the first quartet of 2009.
“We are steadily building a new business in West Africa and we expect 2008 performance to be broadly in line with 2007.”
Revenue increased by 6.3 per cent to €1.106.2 billion, with like-for-like revenue up by 20 per cent. Operating profit (pre-exceptional) grew up 16.5 per cent to €56.5 million while net finance costs were just €500,000 greater than the same period last year (€9.1 million).
The Board is to recommend an interim dividend of 2.75 per cent per share, compared to the 2.50 cent per share interim dividend in ’07. Dividends will be paid to shareholders on October 1st.
So what’s the outlook for the rest of 2008?
“For the full year, Glanbia is confident of a good overall performance and the Group believes it will deliver double digit earnings growth, in line with market expectations,” states the report.