Food group Glanbia grew its revenues 13 per cent in the first half of the year, with its global sports nutrition brand portfolio fuelling the rise. Despite a worse-than-expected performance from its Irish dairy division, the group reiterated its full-year target of an 8-10 per cent increase in earnings per share (EPS).
Revenue at Glanbia advanced to €1.7 billion, with earnings before interest, taxation and amortisation (EBITA) up 6 per cent to €124 million in the six months ending June 29th. Pre-tax profits were up 8 per cent to €95 million. Glanbia increased its interim dividend by 10 per cent to 4.03 cent.
Davy Stockbrokers said it was a "solid interim statement", adding that with "its vertically integrated model and significant internal investment, Glanbia is ideally placed to capitalise on this". A strong performance from the food group's global performance nutrition division helped drive revenue and earnings upwards, as it reported a 14 per cent rise in sales and 20 per cent jump in earnings, up to €34 million.
Glanbia continues to outperform market trends in the US, due to the continued popularity of its sports nutrition brands, which are now the largest sports nutrition brand family globally. Glanbia expects to have a direct sales presence in 17 countries by the end of the year, having most recently moved into Brazil and India, and says full-year results for this division will be "well ahead" of those for 2012.
Global ingredients, which incorporates large-scale cheese manufacturing and value-added nutritional ingredients, also delivered a good performance. Revenue increased 17 per cent, with earnings up 8 per cent, although there was a drop in margins due to the softening of whey prices in the ingredient technologies business unit. Glanbia said the outlook for this division is positive and it will expand its presence in southeast Asia to to take advantage of the fast-growing market.
These two divisions account for more than 70 per cent of the group's earnings and, according to group managing director John Moloney, are the group's "core platforms for future growth". Moloney is stepping down from his role and will be replaced by group finance director Siobhán Talbot.
In Ireland, Glanbia’s dairy division grew its revenues 8 per cent to €383.2 million, with agribusiness performing well due to higher demand for feed and fertilizer as a result of bad weather. There was a “significant underperformance” in consumer products, however, driven by higher milk costs. “We have to adapt to the new reality of consumer shopping habits in Ireland, but this remains quite a small part of the group,” said Mr Moloney.
In Dublin, Glanbia closed down by 33 cent, or 3.1 per cent, at €10.04.