By Eamon Quinn
Shares in Glanbia fell over 8%, bringing their losses to 12% in the last year, despite the foods firm saying it is on course to secure its earnings goal and pointing to a less threatening foreign currency “headwind” from its US operations.
In an interim trading statement, Glanbia said the year is going “as planned”. The shares had gained in recent weeks after it announced the purchase of SlimFast in the US for $350m (€309m).
Valued at €4.36bn, Glanbia is one of Ireland’s most valuable firms.
Chief executive Siobhán Talbot told analysts Glanbia was well on its way to achieving earnings growth of 5% to 8% in 2018 after volumes grew in the first nine months and its pricing power fell by just over 4%, on weaker dairy markets over the period.
“Broadly based” volume growth at its major division Glanbia Performance Nutrition (GPN) rose 6.7% in the first nine months and the outlook for the division “is good”, said Ms Talbot.
Growth at its Body & Fit purchase, which is part of GPN, grew at a slower rate and ready-to-eat foods in the US “remains competitive” after the entry in recent times of large rivals
She said the October acquisition of SlimFast will also fit into GPN as “a well established and growing brand” and will be completed in the next two months.
There were “strong sales” in the third quarter for Glanbia Nutritionals — the division which includes Nutritional Solutions and US Cheese — though volume growth of 6.8% in the first nine months was eroded by price falls of 3.8% in the period.
Its Joint Ventures, including expansion at Southwest Cheese in New Mexico, posted volume growth of 8.4% but was slightly eroded by price declines of 3.4%.
Davy stockbroker reiterated its outperform recommendation on the shares, while Goodbody, which has a buy recommendation, said it was likely to leave its forecasts “broadly unchanged”.