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Performance foods lift Glanbia earnings

Wednesday, August 20 10:16:34

Irish food group, Glanbia, this morning posted revenues for the half year to the end of June last that rose by just over 10pc to E1.8bn with performance nutrition a star performing segment of the business.

Pre-tax profits for the half year rose to E101.5m compared to E95m in the same period a year before while earnings per share rose 11.5pc to around 32.5 cent.

Total Group core profits as measured by EBITA increased by 10.3pc and adjusted earnings per share grew 11.5pc. On a reported basis, Total Group revenue increased 8.1pc, Total Group EBITA increased by 6.0pc and adjusted earnings per share grew by 6.8pc.

Revenues at its key global performance nutritions division rose by 21.8pc to E374.6m, while EBITA grew by 33.6pc to E42.9m. Glanbia said that demand trends within the US sports nutrition market remain positive and international revenue growth remains strong, reflecting the "awareness and high regard" of its brands.

Revenue its its global ingredients division rose by 10.7pc to E565.8m while EBITA fell by 4.8pc to E53.9m from E56.6m the same time last year. The company said the division delivered a satisfactory performance given the challenging milk procurement conditions in Idaho. Glanbia said that while cheese prices in the US have declined from their first half peaks, they remain at relatively high levels.

Glanbia said its Dairy Ireland division saw both revenues and earnings fall. Revenues for the six month period fell by 7.7pc to E353.8m while EBITA dropped over 13pc to E10.5m from E12.1m. The company said its consumer products saw a "satisfactory" performance against a continued challenging market backdrop.

It noted that while milk input costs have fallen modestly in recent months, average milk costs for the first half of 2014 was well above the same time last year.

But its agribusiness revenues fell due to a combination of lower prices and volumes. Glanbia said the fall in volume was mainly due to animal feed and reflected very strong demand in the previous year as a result of poor weather conditions for much of the first half of 2013.

Revenue at Glanbia's joint ventures and associations division rose by over 19pc to E503.4m while EBITA grew by 13.3pc to E22.2m. It said that volume growth was positive across all key joint ventures with Glanbia Ingredients Ireland and Glanbia Cheese benefiting from a favourable milk supply.

The company said the construction of its new E150m milk processing plant in Co Kilkenny is progressing well and is expected to be up and running early next year.

"The outlook for the remainder of the year is positive and we expect to achieve our guidance of 8-10pc growth in adjusted earnings per share on a constant currency basis for 2014," commented Glanbia's group managing director Siobhan Talbot.

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