Performance nutrition helps Glanbia bulk earnings
GLANBIA shares rose after the company hit market targets with its half year results and revealed plans to invest €60m in its global ingredients business.
In the six months to the end of July 5, Glanbia said it increased profits after tax to €86.8m on revenue which grew 7.7pc to €1.3bn.
Those numbers translated into earnings per share of 32.45c - an increase of 11pc when unfavourable exchange rates are taken into account.
Glanbia will increase its interim dividend by 10pc to 4.43c, while it is still forecasting earnings per share to grow by 8pc to 10pc this year.
Growth was driven by the global nutrition and ingredients units which produced almost three quarters of the firm's total revenue.
Sales from performance nutrition products added 21.8pc while the ingredients division saw sales rise 10pc. While margins in performance nutrition rose 110 basis points, margins slumped in the ingredients arm of the company.
In Glanbia's domestic business, Dairy Ireland, sales continued a recent fall, dropping 7.7pc between January and July this year, while margins dipped another 20bps.
Despite the slide in Ireland, company managing director Siobhan Talbot said there were now signs of stabilisation in the market. Overall, she said the group's results reflected a "good first half".
"Global Performance Nutrition was the key contributor delivering strong branded revenue growth, through effective execution in core channels and continued international growth.
"Global Ingredients delivered a satisfactory first half in the context of milk procurement issues in Idaho and unfavourable whey pricing dynamics. Dairy Ireland performed in line with expectation," she added.
The company announced plans to invest €60m in its operations in Idaho to extract high end whey protein from its milk, which can be used for the firm's line of sports supplements.
Ms Talbot said the company had not been directly affected by Russia's ban on EU imports but is closely monitoring the effect on global diary markets.
Glanbia was reported to have pulled out of talks to buy US nutritionals business Muscle Milk earlier this summer and Muscle Milk has since been sold.
Ms Talbot declined to comment on the deal but said Glanbia has never been afraid to walk away if it did not make sense.