Glanbia revenue soars 13% to €1.6bn

Financial analysts have responded favourably to Glanbia’s half-year results, which saw its revenue for the first half of the year rise by 13% to almost €1.68bn.

Pre-tax profits for the six months to the end of June rose to €95m from €88m the same time last year.

Glanbia’s international businesses are all steadily growing sales. Analysts expect Global Performance Nutrition and Global Ingredients to deliver positive year-end results, despite a likelihood of challenges in global markets for the remainder of the year.

Glanbia’s Dairy Ireland division saw its revenues rise 9.2% to €383m, despite earnings falling 24% to €12m, which the company said was caused by lower sales volumes, higher input costs and low consumer confidence in Ireland.

Glanbia group managing director, John Moloney, said: “The group’s first-half performance was driven by Global Performance Nutrition and Global Ingredients. These two business segments now represent over 70% of Group EBITA and are our core platforms for future growth.

“We expect little change in the external operating environment in the second half and with clear challenges remaining in Dairy Ireland we are maintaining our 2013 full-year guidance of adjusted earnings per share growth of between 8% and 10%, on a constant currency basis.”

Analysts at Davy described Glanbia’s half year results as “a solid interim statement with good top-line momentum across key divisions”.

The stockbrokers note that the EBITA (earnings before interest, taxes, depreciation and amortisation) growth in Performance Nutrition (+18.3%) and Global Ingredients (+6.0%) were key to Glanbia delivering a 10.2% increase in earnings per share (EPS) to 30.39c.

Performance Nutrition grew branded sales in excess of 20%.

Davy’s analysts said: “We believe there is a clear growing demand opportunity for Glanbia.

“Nutrition is playing a key role in the lifestyle and dietary choices of a growing number of people. With its vertically integrated model and significant internal investment, Glanbia is ideally placed to capitalise on this.”

Consumer demand in the US, the most developed sports nutrition market, continued to grow in the first six months of 2013. While competition in the sector remains strong, Glanbia noted that Global Performance Nutrition outperformed the market.

The group continues to review its debt facilities, which it is using to leverage growth opportunities in global markets. Net debt has also been reduced from €560m at the end of 2012 to €444m by Jun 2013.

The board is recommending an interim dividend of 4.03 cents per share (HY 2012: 3.66 cents per share), an increase of 10%.