Glanbia targets 8%-10% earnings growth this year

Diversified food group, Glanbia has maintained its full-year guidance for 8%-10% adjusted earnings per share growth on the back of a strong trading performance for the first nine months of the year.

The Kilkenny-based dairy, ingredients and nutrition specialist yesterday said that group revenue, including contribution from its joint venture and associate producers, grew by 8%, on a year-on-year basis, in the nine months to October 4, and said its outlook for 2014 as a whole, remains “positive”.

Group managing director, Siobhán Talbot said the business delivered “a strong performance” for the first nine months, mainly driven by the Global Performance Nutrition arm, while Global Ingredients and other business divisions performed “in line with expectations”.

“We are delighted with the recent addition of Isopure [the US sports nutrition firm Glanbia acquired for around €120m last month] to our market-leading performance nutrition brand portfolio and we continue to invest across the group to support our future growth ambitions.”

During the period, the Global Performance Nutrition division saw revenues increase by 14%, year-on-year, with that rise boosted by around 2% by the acquisition of Scandinavian firm Nutramino in January. Revenues were up by 11% in the ingredients division and an improvement was also noted in the consumer products business, despite continuing challenges in the marketplace.

Revenues were down in Glanbia’s agribusiness division, but its Dairy Ireland arm — which covers its well-known Irish consumer brands and its agribusiness interests here — delivered a “satisfactory” performance. While revenues, in this division, were down by 9%, reflecting a 7% decline in volumes and a 2% decline in pricing, margins were ahead of the prior year, due to the rationalisation and efficiency programmes under way in both units of the division. Management said, yesterday, that it expects to incur exceptional costs of around €11m over this year and next to cover the completion of these programmes.

Glanbia said its net debt, as of the start of this month, stood at €514m, with capital expenditure for 2014 expected to be in the region of €120m.

“Glanbia is on track for full-year guidance after a satisfactory third quarter performance. Year-on-year growth rates slowed, most notably in the Global Performance Nutrition division, but trading conditions are more supportive for the fourth quarter across the group,” said Jack Gorman of Davy Stockbrokers.

Liam Igoe, food analyst at Goodbody Stockbrokers, said that lower like-for-like assumptions within Glanbia’s global nutrition arm will be offset by higher margins, due to increased pricing, meaning Goodbody is unlikely to make any material changes to its forecasts for the group’s earnings.


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