Glanbia shares down on results as it reveals joint venture contracts signed
Stock market listed Glanbia has reported higher sales in the first three months of the year, and said binding contracts have been signed to establish a new joint venture to be known as Glanbia Ireland.
Shares fell 3.14pc to €18.16 each after the company published an interim management statement, under-performing the wider market.
The joint venture plan was first announced in February, if backed by members of Glanbia Co-op it will see the co-operative pay €112m to acquire a 60pc shareholding in the PLC's Dairy Ireland division, which consists of Glanbia Consumer Products and Glanbia Agribusiness.
The joint venture will continue to be 40pc owned by the PLC. If the proposed transaction is approved, Glanbia Co-op will fund the acquisition and part-fund a new €40m Member Support Fund by selling 8.9 million Glanbia PLC shares.
The co-op will also "spin-out" around €100m of shares to members.
The deals will cut the co-op's holding in Glanbia PLC from 36.5pc to 31.5pc, though it will remain the biggest single shareholder.
Meanwhile, Glanbia PLC said it delivered good revenue growth in the first quarter, with total group revenue - including from joint ventures - up 9.6pc on a reported basis and 7.7pc on a constant currency basis.
Revenues growth was driven in part by pricing growth of 2.1pc, mainly a result of improving dairy markets.
The results show sales across its Nutritionals, Dairy Ireland and Joint Ventures units were up compared to a year ago.
Revenue was weaker in the Glanbia Performance Nutrition division, however, even after that unit was boosted by the acquisition of the US Amazing Grass business.
That was "weaker than expected", analysts at Barclays said.
"The outlook for the remainder of 2017 is positive and we reiterate our full year guidance of 7pc to 10pc growth in adjusted earnings per share, constant currency, from the continuing group with growth weighted to the second half of the year," managing director Siobhán Talbot said after the results.