In an interim management statement for the period 3 January to 10 May, Glanbia said the group is performing well and is expected to deliver a strong first year half. As a result Glanbia now expects mid-teen earnings growth for the full year.
So far this year US cheese and global nutritional have put in a good performance, but according to Glanbia, the Irish dairy ingredients business has been the star performer.
Yoyo price jump
In a note to investors, Davy stockbrokers: “There really should be no great surprise in this news given the yoyo jump which has occurred in global dairy product prices. In the first half last year, a period in which Irish ingredients recorded a loss, global dairy product prices were under severe downward pressure.
“It should be noted that cost savings will also contribute to the expected improved out-turn in Irish ingredients.”
The interim statement came out on Tuesday – a day after Glanbia announced that the proposed disposal of its Irish dairy business had been blocked by farmers.
Glanbia had agreed in April to sell its Irish dairy business to its majority shareholder Glanbia Co-operative Society for about €343m but the proposals narrowly failed to garner enough support from the membership. To read more about the vote, please click here.
While the ‘no’ vote means a deal will no longer go ahead, or at least not for the time being, Joe Gill, an analyst from Bloxham Stockbrokers, told DairyReporter.com said the latest financial statement shows that Glanbia is a strong business with or without a demerger. Gill said there are plenty of positives around, and figures are looking up from the Irish dairy operations, which were the ones earmarked for disposal.