Strong performances in its consumer foods and food ingredients divisions counter balanced the expected poor performance in its red meats business and allowed food group Glanbia to report strong results for 1998, with pretax profits up over 25 per cent to €95.7 million (£75.3 million).
Overall, turnover last year fell fractionally to £2.3 billion, partly reflecting business disposals and lower product prices. Operating profits, however, were up by over 19 per cent to £110.5 million while strong margin growth in consumer foods and food ingredients - which offset the problems in the meat division - meant that margins jumped from 3.9 per cent to 4.8 per cent.
In consumer foods, turnover was slightly lower at just over £1 billion, but improved margins and better efficiency in some of the British business drove operating profits up 48 per cent to £58.7 million with operating margins up from 3.7 per cent to 4.8 per cent.
The restructuring programme, which will concentrate liquid milk production in three locations, is now virtually complete with the Rathfarnham dairy to close in the middle of the year. The cheese business in the UK benefited from improved margins despite a weaker overall market, while the liquid milk business in the UK had a "robust performance". Foods ingredients turnover was down slightly to £631.2 million but again, there was a much better performance at the operating level, with operating profits up 26 per cent to £33.9 million and operating margins up from 4.2 per cent to 5.4 per cent.
The meat division, while improving substantially in the second half of 1998, was a major problem area, with turnover down £10 million to £295.1 million and operating profits more than halved from £15.3 million to £6.7 million. Margins and profits are improving in the second half, but it will be some considerable time before Glanbia's meat division produces an adequate return, say analysts.
Turnover at the agri-business division - which mainly involved the sale of farm inputs to the group's raw milk and meat suppliers - was down from £180.7 million to £176.7 million, with operating margins up slightly to £11 million.
