Glanbia to benefit from fast food restaurants’ demand for cheese
A commentary yesterday by financial services firm Investec suggested that Glanbia Ingredients Ireland Ltd can expect growth this year on the back of rising demand for cheese among pizza groups and others in the quick service restaurant (QSR) sector.
“Despite its current focus on the strongly growing performance nutrition market, Glanbia retains a strong interest in cheese production, some of which supplies the quick service restaurant sector,” said Investec. “Its exposure to the European B2B cheese market is now mainly through its Glanbia Ingredients Ireland Ltd and Glanbia Cheese JVs. We estimate Glanbia Ingredients Ireland Ltd accounted for 9.5% of total revenue in FY13A (including JVs) and 6.7% of EBITA.”
Investec based this analysis on figures issued yesterday by Domino’s Pizza Group, which reported a solid start to 2014 with system sales rising by 14.8% to £188.5m (€228m).
Domino’s sales at constant currency in Ireland were up 3.4%.
The pizza chain also reported rising sales in Germany, Switzerland and other EU states. Sales in the US were also positive.
Investec is predicting this rising demand for cheese to continue across the quick service restaurant sector.
Meanwhile, PZ Cussons, with whom Glanbia has a fifty-fifty joint venture in its Nigerian arm Nutricima, is also reporting growth.
Though PZ reports that its commodity products have had to trade in an “extremely competitive environment”, good growth has been achieved in the nutritional beverage JV Nutricima.
“Given Glanbia’s expansion into the global performance nutrition market, Nutricima’s relative contribution to profit has declined but it is comforting to see that it is still gaining traction in the Nigerian nutritional beverage market,” stated Investec.
