Glanbia’s total group profit drops in the first half of 2018

Global nutrition group Glanbia saw its total group profits, after discontinued activities and exceptional items, drop to €98.2 million in the first half of 2018.

This represented a decrease of €16.7 million on the prior half year, according to the group’s results for the six-month period ending June 30, 2018.

Published this morning, the report stated that Glanbia “delivered in line with expectations” for the period.

Overview

The report outlined that the group’s wholly owned revenue from continuing operations was €1,112 million; this represented an increase of 3.6% on constant currency basis, but a decrease of 6.2% on a reported currency basis.

Wholly owned earnings before interest, tax and amortisation (EBITA) from continuing operations was €123.7 million, down 7.3% constant currency (down 16.6% reported), the report added.

Furthermore, wholly owned EBITA margins from continuing operations were reportedly 11.1% – down 130 basis points constant currency (down 140 bps reported).

Joint ventures (JVs) are said to have delivered in line with expectations in the first half of 2018. Glanbia’s share of revenue from the continuing operations of JVs increased by 4.7% in the period.

This was put down to a 7.3% increase in volume offset by a 2.6% reduction in price, the report added.

Meanwhile, an a pro-forma basis – excluding the impact of discontinued operations – adjusted earnings per share from continuing operations was 38.83c. This was a decrease on the prior year of 7.1% constant currency (down 15.8% reported), the report outlined.

‘In line with expectations’

Commenting on the results published this morning, Glanbia’s group managing director Siobhán Talbot said: “Glanbia delivered in line with expectations in the first half of 2018 and reiterates guidance for 2018 full year earnings growth.

We continue to drive volume momentum with 5.7% growth in the first half and reiterate guidance for full year volume growth in the key portfolios of Glanbia Performance Nutrition and Glanbia Nutritional Solutions in the mid-to-high single digit range.

“We expect margins for the full year to be similar to 2017; we prioritised investment in our brands and operational infrastructure in the first half in advance of input cost reductions, which are materialising as expected in the second half of the year.”

Dividend per share

As part of this morning’s report, it was highlighted that the board had determined an interim dividend of 9.71c per share; this compared to 5.91c per share for the first half of 2017, representing an increase of 64.3%.

This is reflective of the revised dividend policy put in place by the board in 2018, which sets a target annual dividend pay-out of between 25% and 35% of adjusted earnings per share, according to the report.

The dividend is scheduled to be paid on October 5, 2018, to shareholders on the register of members as of August 24, 2018. Irish withholding tax will be deducted at the standard rate where appropriate.