Glanbia chief: 10% dividend hike doesn't weaken appetite for acquisitions

The company, whose two largest products are Optimum Nutrition and Slimfast, is also committed to its plans for a south Kilkenny cheese plant

Siobhán Talbot, group managing director, said Glanbia continues to look at purchases for both the ingredients side of the business and for its branded goods.

Glanbia said it has weathered the global Covid-19 crisis, with "really strong" first-half earnings paving the way for an increase in a payout to shareholders and a new share buyback plan. 

Net profit after exceptional items rose to €81.3m in the six months from €55.3m a year earlier, as total revenues rose to €2bn from over €1.8bn.

The company -- whose international operations span fully-owned branded food and health supplements such as Slimfast, as well as joint ventures including cheese plants in the US and Ireland -- will pay out an increased dividend of 10%. It also plans to buy back a further €50m of its own shares.  

The shares rose slightly the latest session and have now climbed 48% from a year ago, to value the company at over €4.1bn.        

Group managing director Siobhán Talbot said the cost of the increased dividend and the share buyback programme will not hamper it making further acquisitions. 

Its appetite for acquisitions has in "no way" been diminished and it continues to look at purchases for both the ingredients side of the business and for its branded goods, Ms Talbot said.                          

In the first-half, it completed a small deal by taking a majority stake in Germany-based company LevlUp, a food brand for video gamers.                          

Its two largest products, Optimum Nutrition and Slimfast, account for 70% of its branded goods.

She said that products aimed at sports and exercise had performed strongly, in particular, as the global lockdowns were lifted. On the diet-side, sales of Slimfast in the US and UK had grown less strongly but she was confident that its sales will strengthen.       

"I would say it was a really strong first half," Ms Talbot said. "You are seeing a strong recovery in the parts of the business that were challenged by Covid in the second quarter of last year, but I would say that our first half are much more than that," she said, referring to businesses that were not affected by the Covid crisis. 

Glanbia said it has been able by and large to pass on price increases as global inflation, including in freight and wage costs, spiked in recent months amid the Covid recovery.

The company said it was committed to its plans for a south Kilkenny cheese plant that has been delayed by planning objections.