Glanbia grew half-year operating profit by 31 per cent year on year to €108.7m (£86m) - impressive given last year's exceptionally strong first half. And a move to expand the Irish milk producer's international operations into high-value nutritional products continues to pay off, with margins up 40 basis points at 7.9 per cent. While, with management upgrading its own targets - earnings growth of up to 10 per cent is expected this year - the shares remain attractive.
The US cheese and global nutritional business is the largest contributor to the group and revenue there rose 9 per cent to €691.3m. Glanbia is looking to expand further with the construction of a cheese innovation centre in Idaho for new product development and to develop closer relationships with its key customers. Meanwhile, in July, Glanbia acquired US-based Aseptic Solutions - a manufacturer of dietary drinks - for €50m.
Turnover at the Dairy Ireland division fell 4.7 per cent to €673.6m and, in order to allow Glanbia to continue focusing on international growth, it wants to form a joint venture in respect of its Irish dairy processing business with majority shareholder Glanbia Co-operative Society.
Broker Goodbody expects to increase its full-year EPS estimate by 7 per cent to 53¢.
| GLANBIA (GLB) | ||||
|---|---|---|---|---|
| ORD PRICE: | €6.35 | MARKET VALUE: | €1.87bn | |
| TOUCH: | €6.33-€6.35 | 12-MONTH HIGH: | €6.35 | LOW: €4.05 |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 181c* | NET DEBT: | 104% | |
| Half-year to 30 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.34 | 82.1 | 22.4 | 3.33 |
| 2012 | 1.42 | 102 | 28.8 | 3.66 |
| % change | +6 | +24 | +29 | +10 |
Ex-div: 5 Sep Payment: 19 Oct *Includes intangible assets of €472m, or 160¢ a share £1=€1.26 | ||||
