Glanbia shares surge by 5pc to €5.60 after strong results
Glanbia's share price hit a record €5.60 yesterday on the back of a strong set of results and continued speculation that a re-run of the demerger of the co-op and Plc is on the cards.
Group managing director John Moloney said Glanbia suppliers would increase production by about 40pc after 2015, when EU milk quotas are abolished.
He said there was "significant debate" within Glanbia about how the company would prepare for this but said no decision would be made until the second quarter of this year.
"We are looking at what is the best way to approach (2015) so there is a huge amount of debate about that. There is no split in the board," he added, referring to recent reports that there were disagreements at board level on how to move the milk-processing business forward.
Mr Moloney was speaking after his company reported strong annual results and increased the final dividend by 10pc, sending shares up more than 5pc.
Net profits topped €112m, an increase of 3pc on 2010 and ahead of expectations, but revenues surged by more than 23pc to €2.67bn. The final dividend topped 4.94c per share.
Operating profit soared 22pc but margins fell 20 basis points to 6.1pc as the company grappled with higher commodity prices and input costs.
Most of the growth came from the US cheese and global nutritionals business rise, where revenue climbed 35pc to €1.38bn, overtaking turnover at the Dairy Ireland business.
Margins in the global nutritionals division slid by nearly 1pc to 9.3pc but were more than double margins in the Dairy Ireland sector.
"The market in nutritionals and dietary supplements has changed somewhat, in that it is now split more or less 50/50 between men and women and is being used right across the board, where a few years ago their use would have been confined to mainly serious athletes and they would have been 75pc male," said Mr Moloney.
Mr Moloney was pleased with his firm's progress but warned 2012 would be "more challenging than in recent years".
"Global economic uncertainty has the potential to impact global dairy markets and fragile consumer confidence.
"The group's focus on driving growth in nutritionals, combined with deep dairy market expertise and strong execution capability, position us well for the future," he added.
The company is guiding for 5pc to 7pc growth in adjusted earnings per share, for 2012.
Bloxham Stockbrokers described them as an "excellent set of results", while Davy Stockbrokers' John O'Reilly also was positive on the figures.
"Glanbia is well positioned (in nutritionals) and also possesses an attribute now being anxiously sought by major food manufacturers and food service operators. That is, secure -- and now expanding -- raw material supply," he said.
Glanbia closed in Dublin up 5.26pc at €5.60.