Glanbia's (GLB) performance in the half year was driven by its sports nutrition and global ingredients divisions, which offset a poor showing from the Irish dairy segment. A weak consumer environment, high promotional activity and significantly higher milk input costs all construed to cause divisional operating profit to fall 24 per cent to €12.1m (£10.3m), despite a 9 per cent rise in revenue. However, demand for fertiliser and feed following poor weather earlier in the year pushed sales in the division's agribusiness ahead of last year.
Growing demand for sports nutrition from health-conscious Americans boosted revenue by 14 per cent to €324m in the global performance nutrition division, while improved margins contributed to a 20 per cent jump in trading profit to €34m. Glanbia is also on track to have direct sales in 17 countries by the end of the year and is investing €45m in Chicago to expand capacity.
Higher US cheese prices, volume growth, and demand for Glanbia's customised premix solutions in Asia, coupled with a recent acquisition, drove revenue at the global ingredients division up 17 per cent to €539m, while trading profit rose 8 per cent to €57.5m. But margins fell by 90 basis points due to lower market prices for lactose and whey.
Based on management guidance for 8-10 per cent EPS growth this year, broker Davy Research expects EPS of 55.1¢.
| GLANBIA (GLB) | ||||
|---|---|---|---|---|
| ORD PRICE: | €10.03 | MARKET VALUE: | €2.96bn | |
| TOUCH: | €10.02-€10.05 | 12-MONTH HIGH: | €11.10 | LOW: €5.90 |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 208¢* | NET DEBT: | 71% | |
| Half-year to 29 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 1.10 | 88.1 | 24.8 | 3.66 |
| 2013 | 1.24 | 95.0 | 27.4 | 4.03 |
| % change | +13 | +8 | +10 | +10 |
Ex-div: 28 Aug Payment: 11 Oct *Includes intangible assets of €475m, or 161¢ a share £1=€1.16 | ||||
