Glanbia struggles at home but plans to expand overseas with €370m war chest
SHARES in Glanbia inched up yesterday after the company reported a stronger-than-expected first quarter and signalled a slew of deal-making this year.
In an interim management statement covering the first three months of its year to April 5, the firm said total revenues surged some 17pc.
That was marginally ahead of expectations, and was driven mainly by volume and pricing growth. Importantly, only 1pc of the increase was driven by acquisitions.
If the first three months of the year – Glanbia's fiscal calendar runs from February– were quiet for the company, the months ahead are expected to be much more lively.
Company managing director Siobhan Talbot said the firm had between €120m and €130m available for transactions, as well as access to another €250m in debt financing.
Much of that finance, however, will likely go into the proposed deal for Glanbia to take over US nutrients firm Muscle Milk for around €360m. Ms Talbot declined to comment on the takeover.
The first three months of the year will have had a familiar look to them for seasoned company watchers.
Glanbia now makes most of its money from selling protein-based athletic supplements, and that sector continued to grow rapidly.
Sales jumped 38pc year on year with all of the firm's markets performing well. While that pace is expected to slow during the rest of the year compared to 2013, the firm has increased its prices for protein-based products in response to higher input costs.
The firm's US cheese and nutrients division saw revenues grow by 10pc, but this was due to higher prices rather than increased volumes.
The Irish consumer foods business continues to struggle, with lower margins and turnover.
Despite the problems in that sector, Ms Talbot said it had stabilised quarter-on-quarter and she now planned to invest in the business and expand it into overseas markets.
Earnings per share guidance for the year was maintained at between 8pc and 10pc.
Analysts were generally positive on the update and by the close in Dublin the shares were up 4.6pc at €11.14, almost wiping out losses for the year to date.