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Friday 21 September 2018

Earnings down at Glanbia, while Kerry reports revenue increase

Glanbia chief executive Siobhan Talbot
Glanbia chief executive Siobhan Talbot
Ellie Donnelly

Ellie Donnelly

Revenue at Kerry Group rose 1.4pc year-on-year to €3.2bn in the six months to June 30, while half year results from Glanbia showed total group profit to be down €16.7m.

Kerry half year results show that the growth in revenue reflected volume growth of 3.6pc and a 0.6pc improvement in pricing, as well as the contribution from acquisitions, according to interim results from the group.

However the consumer foods business saw its trading margin decrease by 10 basis points to 10.5pc, as strong volume growth and contribution from acquisitions were offset by adverse currency movements.

On a constant currency basis, group sales increased by 8pc year-on-year. Group trading profit came in at €340m, up 0.5pc year-on-year, and up 8.7pc in constant currency.

Glanbia

However, half year results at Glanbia showed that earnings before interest, tax and amortisation at Glanbia fell by 7.3pc year-on-year in constant currency to €123.7m in the six months to June 30.

During the period revenue at the group increased 3.6pc to in constant currency to €1.1bn, however it was down 6.2pc in reported currency.

Meanwhile, total group profit (after discontinued activities and exceptional items) for the period was €98.2m, down €16.7m on prior half year.

Glanbia's pro-forma share of joint ventures profit after tax from continuing operations decreased by €8.2m to €17.8m, according to interim results from the group.

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The group described the performance as being “in line with expectations.”

“We continue to drive volume momentum with 5.7pc growth in the first half and reiterate guidance for full year volume growth in the key portfolios of Glanbia Performance Nutrition and Glanbia Nutritional Solutions in the mid-to-high single digit range,” Siobhán Talbot, Group MD, said.

“We expect margins for the full year to be similar to 2017; we prioritised investment in our brands and operational infrastructure in the first half in advance of input cost reductions which are materialising as expected in the second half of the year."

Looking forward, Glanbia reiterated its full year 2018 guidance of 5pc to 8pc growth in pro-forma adjusted earnings per share from continuing operations, in constant currency.

Glanbia’s Performance Nutrition business revenue growth of 4.9pc on a constant currency (down 4.4pc in reported), while its earnings before interest, tax and amortisation declined by 16.4pc on a constant currency basis (down 24.6pc on a reported basis).

Meanwhile its Nutritionals business reported revenue growth of 2.4pc on a constant currency basis, down 7.8pc on a reported basis.

Earnings before interest, tax and amortisation  at the Nutritionals business experienced growth of 4.5pc constant currency, however it was down 6.2pc on a reported basis.

Kerry

Kerry CEO Edmond Scanlon said that evolving consumer trends and the changing marketplace have provided increased opportunities and demand for Kerry's industry leading RD&A and broad technology portfolio.

"This, along with the group's enhanced end use market focus, drove healthy volume growth and underlying margin expansion in the first half of 2018. We also continued to make progress with and invest in business development initiatives aligned to our strategic growth priorities."

During the six month period the group’s taste and nutrition business reported volume growth of 4.1pc, while its consumer foods business reported volume growth of 1.3pc.

Looking forward the group said it was updating its guidance for the year and now expect to achieve growth in adjusted earnings per share of 7pc to 10pc in constant currency.

The group had previously expected to achieve growth in adjusted earnings per share of 6pc to 10pc in constant currency.

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