Glanbia shares fall as investors revolt over Talbot pay hike

Drop triggered by disappointment at results for company's Global Performance Nutrition division

Photo Mark Stedman/Photocall Ireland
Photo Mark Stedman/Photocall Ireland
Glanbia managing director Siobhan Talbot
Margaret Donnelly

Margaret Donnelly

Shares in Glanbia tumbled over 6pc yesterday amid disappointment at a trading update and as more than a fifth of shareholders voted to oppose a 22pc hike for managing director Siobhan Talbot under a new three-year multimillion-euro pay package.

The shareholder revolt at yesterday's annual general meeting (AGM) in relation to pay marked a dramatic swing from last year, when fewer than 1pc of shareholders voted against the executive pay deal recommended by the board's Remuneration Committee.

Ahead of the AGM, two prominent investor advisor groups - Glass Lewis and ISS - had recommended that shareholders vote against the proposal, which sees Ms Talbot receive a pay rise of 22pc and finance director Mark Garvey's pay increase 14.9pc.

Yesterday's sharp share price drop came ahead of the vote, triggered by disappointment at results for Glanbia's Global Performance Nutrition (GPN)

The GPN division reported its first quarterly fall in two years, when the impact of buying SlimFast was excluded.

The GPN division grew by 4.9pc overall, but declined 16.5pc when SlimFast is stripped out.

Investors had expected the decline to be in the low double digits.

The SlimFast acquisition performed strongly, with especially strong consumer demand for recent innovations in the UK and United States, according to the global nutrition group.

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Ms Talbot said the group's strategy "remains on track" as it reported an 8.4pc increase in revenue overall in the three-month period.

"Our strategy remains on track and we reiterate our full year guidance of 5pc to 8pc growth in adjusted earnings per share, constant currency, in 2019, with growth to be delivered in the second half of the year," she said.

Glanbia reiterated its full-year guidance of 5pc to 8pc growth in adjusted earnings per share, with growth to be delivered in the second half of the year.

Analysts at Davy Stockbrokers said they envisaged "no material changes" to Glanbia's financial year 2019 earnings forecast.

The Kilkenny-headquartered company added that it is looking at growing online sales of its nutritional products, especially in Asia.

Ms Talbot told shareholders that health and wellness is one of the biggest global trends among consumers and governments. Health and wellness, she said, is a growing global trend driven by health conscious consumers and cost conscious governments.

"It is a big market, worth over a trillion dollars and is growing globally."

Glanbia is looking to meet consumer demand with a convenient offering for time-poor consumers. she said.

The group is also looking to increase its presence in what she called a "digital connectivity trend" by tapping into online sales platforms such as Amazon and the Asian-based ecommerce giant Alibaba.

Glanbia's acquisition of Body & Fit, a Dutch-based performance nutrition brand that is only available online was playing into this trend with the Irish business now looking to leverage that capability, she said.

"Consumers are very connected and people want to do everything on their smart phone. Consumers have real power through their ability and technology. They can damage or endorse brands," Ms Talbot added.

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