Sales up 17% at Glanbia but warns of 'challenging retail environment'
FOOD giant Glanbia has warned the Irish retail environment remains challenging despite a modest improvement in consumer sentiment.
The Kilkenny firm expects international sales to grow moderately this year despite consumer products continuing “to face significant headwinds” in the first three months of the year.
“The drive to value, through ever-increasing promotional activity alongside rising own label incidence is impacting margins for both supplier and retailer,” it said in an interim statement.
“Milk input costs also remain at historic levels and well above the prior year period.”
Glanbia warned it in implementing cuts in a bid to reduce costs this year although results showed revenue grew 17pc in the first quarter.
Sales in global performance nutrition products soared by 38pc against a relatively soft first quarter in 2013, with all regions performing well.
Siobhan Talbot, group managing director, said Glanbia delivered a good performance in the first three months of the year.
“Global performance nutrition performed particularly well reflecting very strong revenue growth in both the USA and internationally, supported by the ongoing investment in the business,” she said.
“The results across the rest of the group were as expected.
“Performance in global ingredients in the period was behind the prior year as lower milk throughput in Idaho reduced output of cheese and base whey, Dairy Ireland continued to be challenged, while joint ventures and associates' performance was ahead year-on-year.”
Plans for a €50m euro expansion in Chicago are continuing with a second phase expected to be commissioned in the first half of 2015.
While Glanbia's net debt stood at €480m in April, it said its outlook for the remainder of the year was positive. However the rate of growth will moderate in the coming quarters reflecting more challenging year-on-year comparatives.
Glanbia is sticking with its guidance of 8pc to 10pc growth in adjusted earnings per share on a constant currency basis, Ms Talbot added.