Glanbia hits profit target despite poor Irish returns
Company buoyed by growth in its US-based business interests
GLANBIA shook off struggles in the Irish consumer market here to remain on target to hit the top of its profit forecasts, the company said yesterday.
In an statement covering the first 10 months of the year, the company said it expected to record full-year profit at the "upper end" of its forecasts. Earnings per share will grow by an estimated 20pc on the back of revenue that was up 28pc year-on-year.
That forecast, which sent shares up more than 1pc at one point before falling back, came on the back of growth in the company's US cheese and Global Nutritionals business and the production side of the Dairy Ireland arm of the company.
The domestic consumer products division, however, shows no sign of turning around.
"Consumer Products continues to address the very challenging food retailing market conditions in Ireland and underlying revenue is trending broadly flat year-on-year, although margins are squeezed," Glanbia said.
"This business remains focused on consolidating its leading market position in liquid milk combined with rigorous cost management.
"The current rationalisation programme, outlined in the half year results, is delivering cost saving and productivity gains to plan.
"A year-on-year decline in the performance of Consumer Products is expected in 2011," the company added.
It was better news elsewhere in the business though, with revenue from the Dairy Ireland sector up 23pc overall.
Most of the growth came from outside of Ireland, with the high margin nutritionals business in particular recording very strong turnover. Indeed, the US Cheese and Global Nutritionals saw turnover increase 35pc.
Company chief executive John Moloney (below) was bullish on the results.
"Most aspects of the business are performing well in the second half. Year-on-year we are experiencing some margin contraction principally centred on the impact of the significant increase in whey input costs on Performance Nutrition.
"We are confident of a strong full year outcome," he claimed. Mr Moloney said the company has about €150m available for acquisitions.
The statement was welcomed by analysts, with Goodbody's Liam Igoe saying the statement "reaffirmed" 2011 "will be a year of strong growth for the company".
Glanbia closed up 0.92pc at €4.41.