Firm’s mantra of ‘keeping the wealthy healthy’ pays dividends

Glanbia’s mantra of “keeping the wealthy healthy,” shows no signs of letting investors down as the group reports strong results from its nutritional division in the US.

While the Irish market was hit badly by record milk prices, milk still represents a massive growth engine for Glanbia’s joint venture Glanbia Ingredients Ireland Limited.

Glanbia managing director, Siobhan Talbot, said that the development of a €200m plant in Bellevue, Co Kilkenny will be important to growth once quotas are removed.

“It is very important that our supplier base are ready. We have been conducting seminars and information evenings. Our high quality grass-based production system results in high quality product that we believe can be exported to Europe and Asia,” she said.

Although Glanbia Ingredients Ireland Limited will be independent of the Glanbia group, with its own management, sales and strategy, she said that the company will be able to leverage the group’s capabilities to secure large multinational food producers as clients.

Davy analyst, Jack Gorman, was particularly impressed that Glanbia has managed to keep its debt flat despite a number of investment projects like Bellevue.

“We were particularly impressed with the net debt out-turn. Glanbia managed to keep this flat at €374.4m despite continued working capital outflows and increased investment. This was 10% lower than our forecast,” he said.

Glanbia are looking to make further acquisitions targeting a number of companies. “We have a good pipeline of acquisitions but we also have organic growth. We are interested in a number of nutrition companies. It is about the right access, right timing and the right fit,” said Ms Talbot.

Davy’s said the company’s growth forecast was an indicator of how confident Glanbia are across their markets.

“Glanbia states that its five-year ambition is to grow organic adjusted earnings per share by 8% to 10%, constant currency. This signals its optimism on internal growth prospects, all the more so in the context of a challenging demand environment in the broader food sector,” Mr Gorman said.