Morning business news - March 12Wednesday 12 March 2014 10.46
The international dairy ingredients and nutritionals group Glanbia has reported results ahead of expectations this morning with adjusted earnings per share growth of 12% on a constant currency basis. Total group revenue was 8% higher at €3.28 billion. The growth was mainly driven by performance in two areas - Global Performance Nutrition and Global Ingredients. The group is guiding 8-10% growth in EPS on a constant currency basis this year with similar growth out to 2018.
Siobhan Talbot, the new group managing director of Glanbia, said the company was "delighted" to report another strong year of growth. She said the particular areas of growth included Glanbia's international operations, where it has two very strong global growth platforms spanning its global ingredients and global performance nutrition. The company's branded sports nutritionals products saw particularly strong growth.
However, Glanbia's Dairy Ireland division had a more difficult year in 2013, with its consumer products division badly affected. Ms Talbot said its performance, however, has to put in context with the market environment. Milk prices hit record highs last year, and while that was good for the company's milk supplier base, Glanbia was not able to pass on the extra production costs to consumers. The Glanbia boss said the company is doing "all the right things" to sustain the business for the long term and is actually investing in some long-life facilities as the company would like to bring its "great" Avonmore brand off the island of Ireland and possibly into European and Asian markets.
Ms Talbot predicted that milk prices will continue to remain volatile, adding there is now recognition worldwide that food prices have to be at a level to sustain production. High milk prices will become the new norm, she stated. She said she believes there will great opportunities for Irish farmers when milk quotas are abolished in 2015, adding that Glanbia's suppliers are very keen to expand their volumes when that opportunity arises. She also said that Glanbia will continue to report its earnings in euro.
MORNING BRIEFS - Exploration group Kenmare Resources has reported an after-tax loss of $44m for the 2013 financial year. Revenues of $138m were down substantially on the $234.5m reported in 2012. The group has just finished a long period of investment in the Moma titanium mine in Mozambique, which is the focus of its operations, and now hopes to reap the benefits of that.
*** Nearly three quarters of Irish businesses expect to award pay increases this year. That is up from less than two thirds last year, according to PwC's Salary survey. The optimism looks like spreading into next year too with a similar proportion - three quarters - anticipating that they will sanction a hike in pay. Pay increases of the order of 2% are expected this year and will rise marginally to 2.2% next year. Companies are also looking at bonuses and benefits packages as a means to prevent staff from departing. The sectors surveyed included pharmaceuticals, finance, construction, retail, public sector and ICT.
*** The five-star Heritage Hotel in Killenard in County Laois has been put on the market at the instructions of the receiver, KPMG. The sale is being handled by property group, CBRE. The hotel - which was constructed 10 years ago - includes a spa and golf course, which was designed by Seve Ballesteros.