Glanbia profits down in 'difficult' market

Food group Glanbia has announced an operating profit of €40.3m (pre exceptional items and including share of joint ventures and associates) in its interim results for the first half of 2004.

The equivalent amount for 2003 was €45.7m, representing a fall in 2004 of 11.8%. "This reflects the impact of the difficulties in the Irish pigmeat sector on the first half results," the company said in a statement.

Profit before tax was €35.7m, up from €10.7m last year, as there were no exceptionals in the first half of 2004 compared with €26.9m exceptional charges in the first half of 2003.

Adjusted earnings per share amounted to 8.65c (H1 2003: 9.14c), while the interim dividend increased by 5% to 2.16c per share (H1 2003: 2.06c).

The group's turnover declined 7.3% to €974m (H1 2003: €1,050.8m), mainly as a result, the company said today, of the planned restructuring of the group's UK operations within the consumer foods division. This included the part sale of Glanbia Foods Ltd and the related Glanbia Milk operations in the UK, and the creation of a joint venture cheese company with Milk Link Ltd., following the exit from consumer meat activities in the UK in 2002 and fresh meat activities in 2003.

Sales (adjusted for all disposed businesses) increased by 9.2%, a combination of volumes and pricing and a strong performance by the food Ingredients division, the Glanbia statement said.

Group Managing Director John Moloney said: "As outlined in March this year, 2004 is a year of transition for Glanbia as the reorganised and refocused group moves into a development and growth phase.

"The group performed broadly in line with expectations in the first half and the results reflect a strong performance from the food Ingredients division, offset by difficult trading conditions in the fresh pork business unit of the consumer foods division. Good progress was also made on sales volumes, prices and new product launches in the developing nutritionals business.

"Going forward, the group is well positioned to deliver solid earnings growth. We have an on-going programme of investing for the future, combined with strong market positions and leading brands in core operations."