Irish food group Glanbia (GLB) has not been running as fast as the reported numbers suggest. Stripping out the boost to the euro-denominated figures provided by the currency's plunge against the dollar, and adding in the group's share of three joint ventures, sales fell 8 per cent as growth in branded products was offset by the well-documented pricing pressures in the global dairy market.
Global performance nutrition - the division behind protein brands such as Optimum Nutrition, Isopure and Nutramino - was the star athlete, contributing €60.7m in operating profits, up 17 per cent at constant currencies. That was thanks partly to acquisitions and partly to margin improvements driven by operational efficiencies, falling input costs and a rising share of higher-margin branded product sales. Significantly, like-for-like branded revenues grew 3.7 per cent.
But the global ingredients division, which makes US-style cheese as well as high-tech additives for foods such as infant formula, saw cash profits drop 9.5 per cent on a constant currency basis to €60.3m "in the context of challenging global dairy markets". The company announced a restructuring of the division, which it expects to take 12-18 months and cost €15m in exceptional expenses.
Prior to the results, analysts at Jefferies expected pre-tax profits of €223m, leading to EPS of 73¢, up from €190m and 61¢ for FY14.
| GLANBIA (GLB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,829¢ | MARKET VALUE: | €5.4bn | |
| TOUCH: | 1,828-1,830¢ | 12-MONTH HIGH: | 1,959¢ | LOW: 1,075¢ |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 329¢* | NET DEBT: | 59% | |
| Half-year to 4 Jul | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 1.29 | 97.9 | 28.3 | 4.43 |
| 2015 | 1.43 | 117.6 | 33.4 | 4.88 |
| % change | +11 | +20 | +18 | +10 |
Ex-div: 3 Sep Payment: 16 Oct *Includes intangible assets of €705m, or 238¢ a share | ||||
