'Good' performance for Glanbia as sales rise 14%
Food group is guiding towards the upper end of its full year targets; Irish division remains “challenging”
Historically high milk prices and a difficult retail environment are resulting in a “challenging” environment for Glanbia’s Irish consumer products business. Overall the group “performed well” however, group managing director John Moloney said. Photograph : Matt Kavanagh / THE IRISH TIMES
Glanbia, the Irish global performance nutrition and ingredients group, updated the market this morning in an interim statement, reporting revenue growth of 14 per cent in the nine months to October 5th. Its Irish dairy division remains “challenging” however with a rationalisation programme in place to improve competitiveness .
Total group revenue grew 14 per cent in the nine months, comprising approximately 9 per cent volume growth and 5 per cent price growth with the impact of acquisitions and disposals largely offsetting one another.
John Moloney, group managing director said that the group had “performed well” in the first nine months of 2013.
“Trading is in line with expectations and we expect this trend to continue for the remainder of the year. Momentum continues in our two core global businesses, particularly in global performance nutrition where revenue growth continues to outperform market growth rates,” he said, adding that the group expects to deliver earnings per share growth of about 10 per cent for the full year.
Global performance nutrition was strong again, with revenues up by 19 per cent, mainly due to volume growth as pricing was largely unchanged in the period. Overall revenue growth in 2013 is projected to be strong although the pace of growth is expected to moderate in the fourth quarter.
Global ingredients also delivered a good performance, with revenues increasing by 14 per cent.
Dairy Ireland was more challenging however. While revenue grew by 9 per cent - 7 per cent volume growth and 4 per cent price growth - consumer products continues to struggle. Milk input costs rose to historically high levels and the Irish retail environment “continues to be difficult” the group said.
As a result, the group is engaging in a rationalisation programme in Ireland “to improve its competitiveness in the domestic market”. This includes a reduction in the overall cost base through the redesign of its supply network and restructuring of head office functions. The business is also “actively exploring additional revenue opportunities in high growth export markets”.
Earlier this month it was disclosed that the group had initiated a voluntary redundancy programme with staff at three Glanbia sites – Drogheda, Co Louth; Ballitore, Co Kildare; and Citywest, Dublin - expected to be impacted.
The reorganisation programme, which will cost €14-18 million will not have a direct impact on performance in the current year Glanbia said, and therefore results for consumer products for 2013 are expected to be “significantly below” 2012.