For the six months ending 4 July, 2015 Glanbia plc reported an EBITA from wholly owned business of €138.5 million, up 7.5% on prior half year, in constant currency (29.1% up reported).
Total group revenue stood at €1.9bn, which is down by more than 8% on a constant currency basis, but up by 4.4% if you take into account the strong performance of the US dollar. The downturn was blamed on lower milk prices.
Last year Glanbia aid the outlook for GPN was positive and anticipated growth ahead of the market. In H1 it reported an EBITA of €60.7m – a 17.4% increase on the previous half year, in constant currency (up 41.5% reported).
While the US accounts for nearly two-thirds of performance nutrition sales globally and GPN has a firm footing there, it has also invested significantly to expand its international presence.
Meanwhile, the company’s Global Ingredients business reported a ‘satisfactory performance’ within challenging dairy markets, with EBITA of €60.3m – a 9.5% decrease on the previous half year, constant currency (up 11.9% reported). But there was a 'good result' from Dairy Ireland with EBITA of €17.5m, as margins recovered to 4.7%.
Key financials
Adjusted earnings per share were 40.6%, and the group’s managing director, Siobhan Talbot, reiterated full year guidance of growth of between 9% and 11% on a constant currency basis.
She added that, given the strength of the US dollar, this is likely to translate to adjusted earnings per share growth of around 25% for the full year – if foreign exchange rates remain at current levels. An interim dividend of 4.88c per share, an increase of 10% on the previous year, has been recommended.
Talking about the results, Talbot said they demonstrate that the firm’s strategy was on track: “We are focused on the development of a branded and ingredient product portfolio to serve the growing consumer demand for nutritional products in formats suitable for healthy and active lifestyles. This has provided some insulation from the challenges of volatile global dairy markets.”
Taxing questions
Publication of the results in Ireland has led to some controversy, with The Irish Times reporting that Glanbia had paid just €200,000 in tax on profits of €400m which amounts to less than one per cent.
In a rebuttal, Talbot said the firm used “legitimate structures to support its international expansion” and the effective tax rate they paid was 17%.
She added that the firm was a ‘very significant economic contributor’ to countries in which it operates, including Ireland.