Ireland-based Glanbia today (26 April) reported higher first-quarter revenues, helped by growth from the company’s ingredients business, amid falling volumes from its performance nutrition arm.
Revenues from Glanbia’s wholly-owned businesses rose 7% in the three months to 1 April, equating to a 4.7% increase on a constant-currency basis.
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Total revenue, including Glanbia’s share of joint ventures and associates, increased 9.6% on a reported basis and 7.7% when exchange rates are stripped out the numbers.
Siobhán Talbot, Glanbia’s managing director, said the business had seen “good revenue growth” in the first three months of 2017, with the company’s Glanbia Nutritionals ingredients division “the main driver of growth”. The unit saw revenues rise 10.3%, with volumes up 2.7%.
Talbot said Glanbia’s performance nutrition division, which markets products including whey powder and protein bars, had “delivered in line with expectations, as a strong performance in non-US markets countered some challenges in the US market”.
The unit’s revenues dipped 0.2%, with volumes down 3.1% amid “a continued decline” in Glanbia’s contract business.
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By GlobalDataGlanbia has forecast a “mid-single digit” increase in annual like-for-like sales from its performance nutrition division, which has been central to the company’s growth in recent years. It forecast the unit’s volume growth would be “weighted towards the second half of the year”.
The group stuck to its forecast for annual adjusted earnings per share – on a constant-currency and a pro-forma basis – to be up 7-10%.
Alongside the trading update, Glanbia said it has moved a step closer to selling a 60% stake in its domestic dairy products business.
Glanbia said today it had “signed binding legal agreements” for the sale of the majority stake in its Dairy Ireland division to the Glanbia Co-operative Society, the company’s largest shareholder.
The group announced in February the two sides had penned a memorandum of understanding on the transaction.
Jefferies analyst Martin Deboo said Glanbia’s financial year was “off to a decent start”. He added: “Rising dairy prices are now making their presence felt firmly in nutritionals, where growth was ahead of our expectations. Performance Nutrition moved into positive pricing territory for the first time in two years, consistent directionally with our buy thesis, but not as decisively as we would have liked, reflecting a still-difficult environment in the US.”
Shares in Glanbia were down 2.73% at EUR18.14 at 10:27 BST.
