Glanbia plc, the international dairy foods ingredients group, announced its interim results today for the six months ended 1 July 2006.
Revenue decreased 3.3 million to 922.8 million (H1 2005: 926.1 million). The downturn in performance in the Food Ingredients division, particularly the Irish operations, led to a decrease in overall operating profit and margins. Operating profit pre exceptional declined 1.9 million to 36.4 million (H1 2005: 38.3 million) and the operating margin pre-exceptional was down 20 basis points to 3.9% (H1 2005: 4.1%). There were no exceptional items in the first half of 2006 (H1 2005: 4.2 million).
Net financing costs pre exceptional were down 1.2 million to 6.5 million (H1 2005: 7.7 million) as the Group continues to benefit from the refinancing initiatives undertaken in 2005.
The Group's share of results of joint ventures and associates amounted to 283,000 (H1 2005: 38,000) with further improvements in performance in Glanbia Cheese, the Group's UK joint venture with Leprino Foods.
Profit before tax pre exceptional at 30.2 million was similar to the same period last year (H1 2005: 30.6 million). Taxation pre exceptional amounted to 3.2 million in the first half of this year compared with 3.9 million for the same period last year. Profit after tax for the period pre exceptional at 26.9 million was also comparable to the first half of 2005 (H1 2005: 26.7 million).
Earnings per share amounted to 9.12 cent (H1 2005: 7.66 cent per share) and adjusted earnings per share amounted to 9.12 cent (H1 2005: 9.10 cent per share).
Acquisition
Glanbia also announced today the acquisition of a California based nutritional business, Seltzer Companies, Inc., (Seltzer). The total consideration is US$105 million (81.8 million), of which US$80.0 million (62.3 million) cash is payable on completion and US$25.0 million (19.5 million) deferred payments, which are contingent on the achievement of specific performance targets. The business is being acquired on a debt free basis and will be funded through Glanbia's existing financing facilities. The transaction is subject to approval by the US Federal Trade Commission and completion is expected in October 2006.
In 2005, Seltzer generated revenue of US$52.6 million (41.0 million), profit before taxation of US$6.4 million (5.0 million) and had gross assets of US$17.0 million (13.2 million) at December 2005.
Seltzer is a leading US nutritional solutions company with strong expertise in the development of customised formulations and the distribution of speciality ingredients for the nutritional supplement, food and pharmaceutical markets. It specialises in the development and supply of bulk fine nutrients (amino acids, minerals and vitamins) and nutritional premixes. Seltzer employs 94 people and services a customer base across the US from three facilities in San Diego County. The business will continue to be run by the existing management team, led by Wayne Seltzer.
Glanbia says acquisition is significant :
- Seltzer's growth prospects broaden the potential for the Group's US and international nutritional solutions business where Glanbia is a key supplier of nutritional premixes and functional customised formulations;
- Seltzer creates the opportunity to extend Glanbia's major investment in innovation and clinical research in nutritional products with science-based health benefits; and
- Seltzer is a strong fit with Glanbia's existing nutritional business delivering increased scale in key growth sectors.
