Food group ‘on the up’ after ‘dream start’ and strong figures

There is a stockbrokers consensus that Glanbia is on the up, following a strong set of figuresreported despite of the weak economic climate.

Davy’s analyst John O’Reilly said that the company had got a dream start to the first year of the restructured group.

“Glanbia could not have begun its strategic transformation in better style with stronger-than-expected growth in financial year 2012 and a positive growth expectation for the current year and thereafter,” he said.

Goodbody analyst Liam Igoe said that the company had a particularly strong performance in the American nutritionals sector.

“The key driver of the 24% rise in consolidated operating profits was its core US cheese and global nutritionals division, where profits increased by a third last year and in line with our forecast,” he said.

The American market has become Glanbia’s main area of focus since it sold its 60% interest in Glanbia Ingredient Ireland (GII).

Mr Igoe noted that profits of the Irish arm were hit by the sale of Yoplait but held up better than be expected.

“The continuing consolidated Irish based businesses saw profits fall 14%. This reflected the on-going sale of the Yoplait business (€18m proceeds), competitive conditions in the mainstream branded goods market and weaker sales within the agribusiness unit,” he said

Davy’s rated Glanbia as outperform, while Goodbody said that they were in agreement with the groups own guiding of 8%-10% growth.