Glanbia improves FY profit, proposes creation of Glanbia Ireland JV

Nutrional ingredients maker Glanbia has booked an improved full-year pre-tax profit and proposed the creation of a strategic joint-venture to be known as Glanbia Ireland.

"Glanbia had a strong group-wide performance in 2016, delivering our seventh year of double-digit earnings growth coupled with strong cash conversion," said group managing director Siobhan Talbot.

"It has been an exciting start to 2017 with a number of key strategic initiatives progressing which will shape the future direction of the group," she said in a statement.

The company posted a full-year pre-tax profit of €252.8m, from €218.7m. Revenue was €2.85bn, from €2.77bn. It recommended a final dividend of 7.94 cents a share, taking the total to 13.31 cents, up 10%.

Meantime, Glanbia and Glanbia Co-operative Society Ltd (hereafter, Glanbia Co-op) have signed a non-binding memorandum of understanding for the proposed sale of a 60% interest in Glanbia's Dairy Ireland segment to Glanbia Co-op.

Dairy Ireland is 100% owned by Glanbia and comprised two business units, Glanbia Consumer Foods Ireland and Glanbia Agribusiness.

Glanbia and Glanbia Co-op intended to form a new strategic joint venture known as Glanbia Ireland, which would encompass Glanbia Ingredients Ireland, Glanbia Consumer Foods Ireland and Glanbia Agribusiness.

The JV would be 60% owned by Glanbia Co-op and 40% owned by Glanbia.

At completion, Glanbia Co-op would pay Glanbia €112m for a 60% equity interest in Dairy Ireland. Glanbia Ireland would acquire 100% of the working capital in Dairy Ireland at completion financed by banking facilities.

"All of these initiatives demonstrate a desire to play to our strategic strengths and are aligned to our vision to be one of the world's top performing nutrition companies," said Talbot.

At 10:45 GMT, shares in Glanbia were up 1.61% to 17.63p each.