Glanbia post pre-tax losses of €14.9m

DIVERSIFIED food group Glanbia has posted pre-tax losses for 2003 of €14.9 million as the final €90m plus part of restructuring costs in Britain took its toll on last year's figures.

Losses before tax in 2002 were €8.11m.

At the operating performance level it showed profits up 1.4% from €91.5m to €92.97m for the year.

Operating margins also rose from 3.9% to 4.5% and the group is targeting a 6% margin over the next few years. Adjusted earnings per share (EPS) were up 10.4% to 19.26 cent, slightly ahead of the markets projections.

Despite the higher margins achieved on lower sales, the share price fell 11 cent to €2.44 by the close of trading.

Glanbia's shares have been gaining support over the past 12 months as the group defined its strategy going forward in more specific terms.

Chief executive, John Moloney, said the group turned in a "solid performance in 2003, achieving strong operating margin growth, improved profitability and positive cash flow."

The group has completed its British restructuring ending a three year programme of reorganisation.

It has initiated investments in the US, Nigeria, Mexico and Ireland to give it greater market penetration in its key areas of operation.

The group has three focussed platforms for future growth that includes cheese, nutritional ingredients and consumer foods, with a strong emphasis on nutrition.

Consumer foods covers Britain, Ireland and Europe and last year accounted for 44% of sales and 48.25% of operating profit. That fell from €47.59m in 2002 to €44.77m last year.

Food ingredients comprises the US and Irish dairy ingredients operations and the nutritional business.

It is 44.4% of the total sales and 36.4% of overall operating profits in the group.

Apart from well known brands such as Yoplait and Avonmore Glanbia is now the largest producer of US barrel cheese; the second largest producer of whey protein concentrate and the third largest producer of lactose.

When the joint venture in New Mexico is completed the group will also be the leading producer of American type cheddar.

Its domestic based agri business division is a back up to the group's 5,600 milk suppliers and contributes over 15% of operating profits at this stage.

Mr Moloney said he believes that the group has laid the foundations for strong earnings growth into the future.

To ensure that it stays at the cutting edge of the nutrition end of the food market an innovation centre has been set up that will employ up to 25 scientists in a few years.