Glanbia's pretax profits rise to €80m

Food group Glanbia signalled the end of a period of restructuring yesterday as it reported profits of close to €80 million for 2004.

Profits before tax and a once-off gain of €1.2 million, were €77.7 million for the year, a 1 per cent increase on the €77.1 million it reported last year.

Including the exceptional gain, profits before tax for 2004 were €78.9 million, compared with a €15 million loss for 2003.

The loss was the result of a €90 million charge against profits that was largely the result of the restructuring and sale of loss-making and low-margin businesses in the UK. The group has completed this process.

Stripping out last year's exceptional gain, which stemmed from the sale of assets, earnings per share (eps) grew 4.4 per cent to 20.1 cent from 19.26 cent in 2003.

Group turnover from continuing operations grew 10 per cent to €1.83 billion in 2004 from €1.66 billion in 2003. Total group turnover dropped 10 per cent to €1.85 million, as a result of the restructuring of its UK operations.

Glanbia's share of the sales of joint ventures, which largely consists of its UK mozzarella cheese business, was up 9.2 per cent at €75 million.

Operating profit fell 5.6 per cent to €83.5 million from €88.5 million over the same period.The group attributed this largely to difficult trading in its pork business early last year. A fall in group interest from €15 million to €6 million compensated for this. Its two other key divisions, food ingredients, which includes its US cheese-making operations, and agribusiness, performed up to expectations.

Yesterday, group managing director John Moloney said Glanbia was on the look-out for possible acquisitions. It has a war chest of between €40 million and €100 million for this purpose.

However, Davy analyst John O'Reilly pointed to the group's human nutrition division, which is currently working on developing micro-proteins found in whey, as a potential source of future growth.

Mr Moloney said the group performed satisfactorily and delivered results in line with expectations. "For 2005 our focus will be on the completion of the major strategic dairy processing investments in New Mexico and Nigeria, development initiatives which build scale and diversity and driving cost efficiencies that enhance performance," he said.

Glanbia's share price remained unchanged at €2.94 in Dublin last night.