Glanbia gives positive outlook for 2014 performance

Tuesday 13 May 2014 13.33
Glanbia predicts its earnings overall for the year will be in line with previous expectations of 8-10% growth
Glanbia predicts its earnings overall for the year will be in line with previous expectations of 8-10% growth

Food group Glanbia said its total revenue grew by 17% in the three months to April compared to the same time last year.

In an interim management statement, Glanbia said its outlook for the year is positive, adding that its earnings overall for the year will be in line with previous expectations of 8-10% growth.

However, it said its Consumer Products business in Ireland, where Glanbia owns brands such as Avonmore, continues to face "significant headwinds". 

Heavy price promotions and discounting activity is hurting margins for both suppliers as consumers remain cash-strapped and seek out value, the company added.

The company said it is addressing the challenges through its cost rationalisation programme, which is on track to deliver savings this year.

Glanbia said its Global Performance Nutrition division reported a very strong performance for the first quarter with revenues up 38% compared to a relatively soft first quarter in 2013. It said it expects continued growth on its 2013 performance.

Its Global Ingredients division saw a "satisfactory" performance in the first quarter in a somewhat challenging milk purchasing environment in Idaho. Overall revenues rose by 10% on the back of an increase in market pricing for cheese and certain whey products which also drives higher milk input costs. 

Revenue growth in its US Cheese division was positive as the impact of higher market pricing more than offset a decline in volumes. But revenues in its Ingredients Technologies division fell modestly due to lower volumes and stable pricing.

Glanbia said that market conditions in its Dairy Ireland division remained challenging. Revenues were broadly in line with the previous year reflecting 5% volume growth and a 5% fall in prices. "Performance is forecast to improve over the course of the year with positive year on year growth expected for the full year," the company stated in today's trading update.

Revenues for its Joint Ventures and Associates were 27% higher than the same time last year due to higher world dairy market pricing, while volumes also grew. 

Glanbia said the construction of its €150m processing plant in Co Kilkenny continues to progress well and should be ready for production by early next year.

Shares in the company moved higher in Dublin trade today.