Glanbia doubles share buyback to €100m as it upgrades forecasts

The Irish-listed firm, which owns weight-loss brand SlimFast, has upgraded its full-year earnings guidance on the back of the sale of its cheese business, saying it expects double-digit growth in profit margins for 2023, concentrated in the second half of the year.

In March, Glanbia announced a €50m share buyback after reporting record earnings in 2022.

“Overall, the first quarter has progressed largely as expected for the group and we are pleased to be upgrading our full year guidance for growth,” said group managing director Siobhán Talbot ahead of the group’s annual general meeting on Thursday.

“We continued our portfolio evolution and recently completed the sale of the plc’s holding in the Glanbia Cheese joint ventures to our partner Leprino Foods.

“As a result, we have increased and extended the share buyback programme.”

Revenues for the group declined by 2.4pc in the first three months of the year, due mainly to a 6.2pc decline in volumes, but also “the net impact” of a 3.5pc price increase and acquisitions and disposals, Glanbia said in an interim management statement today.

The group’s US cheese business - the sale earned the firm a net €179m in the period - was the only division to see a slight growth in volumes in the first quarter.

A 14.1pc price hike in its Glanbia Performance Nutrition (GPN) drove revenue growth of 4.6pc, despite volumes falling 9.5pc (on a constant currency basis).

Its other main division, Glanbia Nutritionals, saw a 5.3pc dip in revenues in the first quarter, drive by price cuts and lower volumes, as well as acquisitions and disposals.

Volume declines were driven by “customer supply chain rebalancing” the group said, which “is expected to normalise during the second half of the year”.

Glanbia's net debt at the beginning of April was $604.8m, down $5.6m compared to the same period last year.

The statement said the group has “considerable capacity to finance future investments”.

For the year, the group expects revenue growth in its GPN division while its GN division is expected to fall due to lower dairy market pricing and volume declines.

It has raised its earnigs per share forecasts to 7-11pc and said it expects earnings before interest, tax and amortisation (ebita) to grow by 12-13pc.

“While elements of the global environment remain challenging, the strength of our platforms in better nutrition, supported by the combination of pricing actions taken, operational efficiencies and reduced input costs in the second half of the year gives us continued confidence that we will deliver strong full year Group ebita growth, which will be largely driven by GPN,” Ms Talbot said.