Glanbia shares rise as results surpass market expectations
Firm's global nutritionals business has driven growth
SHARES in Glanbia rose after the company yesterday reported strong annual results that beat market expectations.
The company said earnings before interest and tax rose 22.8pc to €136.5m on the back of revenue that rose by nearly a fifth to €2.2bn.
Those figures translated to adjusted earnings per share of 38.07c compared to 30.68c a year ago. The dividend was increased by 10pc to 7.52c.
The growth was driven mainly by the global nutritionals business but was boosted by a rebound in the Dairy Ireland business.
The Dairy Ireland arm of the group benefited greatly from the jump in milk prices. The business saw revenue increase by 10.7pc to €1.1bn but operating profit surged by 74.2pc to €47.9m
Managing director John Moloney said he expects that performance to continue into 2011
"With improving farm incomes, demand for agribusiness farm inputs was good in 2010 but price competition was a significant feature of the trading environment. These trading conditions are expected to prevail again in 2011," he said.
Glanbia said the consumer business in Ireland was "very challenging" and consumers here are expected to remain "very cautious" as a consequence of the economic situation."
US cheese prices played a significant role in the growth of the cheese and global nutritionals business, which the company said performed "reasonably".
Revenue there increased by nearly a third to top €1bn, generating EBITDA of €93.9. Margins, however, fell by 170bps on a constant currency basis.
"We delivered strong revenue and earnings growth and our 2010 performance reflects the strength and diversity of our businesses.
"The group is well positioned for 2011. Our current expectation is that the trading environment for 2011 will be broadly positive," Mr Moloney said.
He added that global dairy markets were expected to remain firm, underpinned by robust demand, particularly from Asia, and demand-led growth in key nutritionals sectors.
"For 2011, given our strong market positions and growing portfolio, we are forecasting 11pc to 13pc growth in adjusted earnings per share, on a constant currency basis," he said