Job cuts leave Glanbia in the red

Food producer Glanbia dived to a half-year loss today after counting the cost of an overhaul which left 700 UK workers redundant.

The Ireland-based company also battled tough dairy markets but described its showing for the six months to June 29 as solid and told investors to expect a “satisfactory” full-year performance.

Glanbia added it was now better positioned for growth after reshuffling its operations in a move that shut the company’s UK consumer meats business.

The operation, which handled sliced cooked meat products, employed 700 people at Bradford and Milton Keynes but was axed earlier this year after Glanbia saw no immediate prospect of a trading revival.

A further 500 staff have also transferred to rival firm Peter’s after Glanbia sold its UK food distribution business, including a facility at Tamworth, Staffordshire and eight regional depots.

The changes led to an exceptional charge of €75.6m and resulted in interim bottom-line losses of €40m, compared with pre-tax profits of €32.2m last time.

However, the underlying performance was brighter with operating profits unchanged at €45.4m and turnover broadly flat at €1.25bn.

Both of the disposed operations belonged to the company’s consumer foods division, which produced an improved performance in the first half.

Despite falling prices, the UK retail cheese business lifted sales and achieved profitability thanks to increased plant efficiencies.

Glanbia is one of the world’s top five cheesemakers and the largest producer of pizza cheese in Europe.

Across the consumer food division, turnover was slightly lower at €641.4m, although operating profits advanced to €17.3m from €7.1m a year earlier.

The company’s other major division is focused on dairy food ingredients and supplies the international nutrition and food processing sectors.

A satisfactory performance was achieved in the United States but Irish operations were impacted by weak international dairy markets.

Those conditions contrasted sharply with a more buoyant mood a year earlier and left operating profits for the division down at €19.3m compared with €28.2m last time.

The company employs more than 5,500 staff in Ireland, the UK, Belgium and the United States.