Food group Glanbia expects growth of at least 10 per cent this year, following a strong performance in 2007 driven by increasing demand for dairy products, writes Barry O'Halloran.
The news sent the group's price to a 10-year high of €5.15 at one point in trade on the Irish Stock Exchange yesterday. The company closed over 8 per cent up at €5.10 in Dublin last night.
The Kilkenny-based dairy processor and food ingredients producer said in a trading statement yesterday that earnings per share (eps) for 2007 would be "at the upper end of expectations".
A poll of stockbroker analysts, compiled by news agency Bloomberg, predicted an average earnings per share increase before once-off items of 18 per cent to 26.6 cent for 2007.
Glanbia said that the performance was driven by strong results from its food ingredients and global nutritionals businesses. The first full-year contribution from California-based Seltzer Co, which it bought in 2006, also boosted these divisions, the group said.
"Favourable market conditions, including increased global demand for dairy products and strong organic growth in all segments of this division, underpin the 2007 results and an expected good performance in 2008," Glanbia added.
Managing director John Moloney said global dairy markets were continuing to evolve, but said this year's outlook was positive. "Glanbia is well-positioned for sustained double-digit growth going forward," he said.
Glanbia produces a third of the Republic's milk and cheese and has benefited from increased dairy prices, driven largely by global demand, over the last year. However, increased milk and other commodity prices also meant that it faced increases in some raw material costs in 2007.
"Consumer foods had a challenging year and will be behind 2006 performance," the group's statement said. "The liquid milk and chilled-food sectors remain competitive and in 2007 were impacted by the time lag in recovering the significant price increases for raw materials."
Glanbia said it was taking a number of initiatives to recover these costs.
