Lower earnings guidance drags down Glanbia shares

By Geoff Percival

Glanbia has said it will see a fall in first-half earnings this year, news of which dragged its shares down by almost 2%.

The Kilkenny-headquartered nutritionals and dairy group reported a 4.8% rise in revenues for the first quarter of the year, with its Performance Nutrition and Nutritonals divisions showing particularly strong growth.

Siobhan Talbot, Glanbia

However, the impact of investments and competitive dairy market pricing will mean “a reduced performance” for the first half of the year, the group has warned.

That said, the group expects second-half earnings growth and has maintained its full-year growth guidance.

“The year has started as planned and we reiterate our full-year guidance of 5%-8% growth in adjusted earnings per share, constant currency, from the continuing group in 2018, with growth to be delivered in the second half of the year,” said managing director Siobhán Talbot.

Revenues from joint venture agreements increased by nearly 30% in the first quarter; last year’s transaction to create Glanbia Ireland — the entity co-owned by the plc and Glanbia Co-op which houses the consumer products, agribusiness and ingredients interests of the group — delivering 34.8% revenue growth.

“We currently forecast around 7% earnings per share growth for 2018, in constant currency terms, and are unlikely to change our forecasts. Overall, at current valuation, we retain our positive stance on the stock,” said Goodbody analyst Jason Molins.

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