10 July 2007 - Glanbia plc, the international dairy foods and nutritional ingredients Group, today issues this trading statement for the six months ending 30 June 2007. Interim Results are due to be announced on Wednesday, 29 August 2007.
Overall, Glanbia had a positive first half performance with good growth in revenues, profits and margins. As a consequence the Group expects earnings per share will show an increase of approximately 20%, compared with a flat first half performance in 2006. There were a number of contributing factors, as Glanbia continues to benefit from its spread of businesses and ongoing execution of its growth strategy, against a backdrop of positive trends in world dairy markets.
For the first six months of 2007, Consumer Foods and Agribusiness and Property performed broadly in line with expectations, even though markets remain competitive. Food Ingredients, the Group's largest division, delivered a strong performance. While Food Ingredients Ireland delivered an improved performance when compared with a difficult first half in 2006, the key performance drivers for this division were Food Ingredients USA and Nutritionals, including a full six month contribution from Seltzer Companies Inc., the 2006 Nutritionals acquisition.
Conversely, the dramatic increases in raw material prices as a result of strong global dairy markets led to short term trading pressures in the Group's key international joint ventures in the UK, USA and Nigeria, as these businesses experienced an inevitable time lag in recovering or redressing these cost increases. While this is being actively managed, these operations encountered challenging trading conditions, which will be reflected in disappointing first half performances. Operationally and in terms of market development these businesses are performing well.
Glanbia expects the Group's full year performance in line with the upper end of market expectations, despite a cautious outlook for international joint ventures for the second half. The Group will give a full update on the expectations for 2007 at the announcement of the Interim Results.
John Moloney, Group Managing Director, commented 'Glanbia had a very satisfactor y performance in the first six months and expects to deliver earnings per share growth of approximately 20% for the first half of 2007. For the full year, there are some short term factors in our international joint ventures that cause us to be a bit cautious at this time. However, we expect to deliver strongly in terms of profits, margins and earnings and we are confident that the Group is well on target to deliver strong double digit growth for 2007 as a whole. Overall, I am pleased that the Group's growth strategy and spread of business is delivering and the outlook is positive for sustained high growth going forward.'