Glanbia sees pre-tax profits jump 5.4%
Operating profit was 0.6% ahead of the first half of 2002 despite a 15.7% drop in turnover to just over €1 billion arising from the group's exit from its British consumer meats and foodservice businesses in the middle of last year. Overall, the group benefited from growth in profits in consumer foods and agribusiness operations.
It said its food ingredients business had an excellent operating performance, but results were impacted by difficult market conditions and the strengthening of the euro. Group managing director John Moloney said the results represent a solid performance. Operating profit is up despite the reduced turnover.
At the same time, the operating margin increased from 3.6% to 4.4% and borrowings were reduced by some €57m. Mr Moloney said the reduction in borrowings by 18.5% means Glanbia's financial base is much more solid. It leaves it well positioned to move forward on the growth agenda at a faster pace.
"In the climate of change in the dairy industry today, I think it is particularly important to move forward, growing product and routes to market, internationally in particular," he said.
Mr Moloney said the markets are now showing some signs of recovery, which would be helpful, but that is being masked to some extent by the strength of the euro against the dollar. Chairman John Corcoran said Glanbia is continuing to make good progress in 2003, benefiting from increasing focus on value-adding products and market sectors.
But difficult trading conditions, including currency movements, are persisting, particularly in key commodity markets served by the group. "As markets currently stand, the group expects to achieve a satisfactory full-year trading performance," he said. Mr Corcoran said the board is confident the initiatives to build Glanbia's position in its chosen sectors will deliver earnings growth in future years.
Other highlights of the interim results included an increase in the interim dividend of 5%, rising to 2.06c per share. Redundancy costs totalled €9.50m in the period, arising from a fire at a Roosky, Co Roscommon, pigmeat plant in 2002. This was offset by an exceptional gain of €11.60m from the insurance settlement.
