Profit news from Nigerian partner lifts Glanbia as share price rises

PZ CUSSONS, Glanbia’s joint venture partner in Nigeria under the Nutricima name, says the business will be in profit in its current half-year which ends in May 2009.

The news has caught the attention of Irish analysts and Goodbody’s Liam Igoe has a buy recommendation on the stock.

Shares in Glanbia closed up at €2.80 yesterday, an increase of 7 cents, or 2.56%, on a day the market rose by just over 1%.

Cussons interim statement showed that geographically and operationally the Nigerian business is well diversified and performing well.

Nigeria is the main trading area for Cussons said to be suffering less from the global slowdown than other markets.

In the case of the joint venture with Glanbia, Cussons said lower milk ingredient input costs will be a factor in its anticipated second half profit for the JV.

Food analyst John O’Reilly with Davy Research said in a note yesterday “the venture’s core brands, Nunu and Coast, continue to perform well, and the portfolio has been enhanced with the launch of a powdered yoghurt drink under the brand name Yo!”

In its statement Cussons said the scope of the product portfolio will be expanded further when the UHT factory, currently under construction, is commissioned in the second half of the current year.

Liam Igoe, commenting on the statement from Cussons, said the group’s assertion that the rising milk costs that hit the group in the first half are now falling, leading management to expect the business to be profitable in the second half of 2009, which is in line with our own expectations with r3altin to Glanbia.