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(Alliance News) - Glanbia PLC on Wednesday reiterated its annual earnings guidance and has also agreed to sell its stake in Glanbia Ireland to Glanbia Cooperative for EUR307 million.
The Kilkenny, Ireland-based food and nutrition group reported 16% increase in wholly-owned revenues on a constant currency basis during in the nine months to October 2, 2021. On a reported basis, revenue was up 10% on the year before.
Glanbia attributes this to the "good demand" from both its Performance Nutrition and Nutritionals units.
Performance Nutrition's revenue in the period was up 23% on a constant currency basis, while like-for-like revenue grew 25%.
Nutritional Solutions volumes grew 16% on a constant currency basis in the period, attributed to "strong ongoing customer demand for micro-nutrients and healthy snacking solutions".
"The group continues to navigate the various impacts of the Covid-19 pandemic well delivering strong volume growth in the third quarter with our plants operating to plan and price increases implemented in response to cost inflation," Managing Director Siobhan Talbot said.
The company expects "strong" revenue growth to continue in the fourth quarter. As a result, it expects adjusted earnings per share to rise at the higher end of guidance between 17% to 22% growth.
Glanbia raised its guidance for adjusted earnings per share from previous expectation of 6% to 12% growth - which was initially raised in August in the release of its interim results.
Talbot continued: "As we exit 2021 we will maintain our focus on driving top line growth and are planning further pricing actions for early in 2022 in response to the continued inflationary environment."
The company still notes that cost inflation has become a headwind during 2021 leading to pricing action in its Performance Nutrition and Nutritional Solutions units. The company said it will look to mitigate inflation during the course of 2022 with further pricing actions, volume growth "and the realisation of benefits from the Performance Nutrition transformation programme."
Separately, Glanbia also said it signed an agreement to sell its 40% stake in Glanbia Ireland to Glanbia Cooperative for EUR307 million.
The sale is part of its strategy to focus on its "two growth platforms" Performance Nutrition and Nutritionals, as well as "strategic joint ventures."
The proceeds of the transaction will be used for growth opportunities with up to 50% being returned to shareholders through a share buyback.
Glanbia Ireland is a joint venture, owned 60% by Glanbia Co-op and 40% by Glanbia PLC.
GI is a milk processor and grain buyer in Ireland. To help pay for the deal, Glanbia Co-op will finance 50% of the transaction through the sale of shares it owns in Glanbia PLC. Glanbia Co-op also plans to transfer, via a spin out to its members, up to 12 million shares in Glanbia PLC.
Glanbia Co-op, a dairy co-operative in Ireland, owns a 31.5% stake in Glanbia PLC.
In 2020, GI generated revenue of EUR1.91 billion and profit after tax of EUR60.0 million, equating to about 8.5% of Glanbia PLC's adjusted earnings per share.
Glanbia PLC shares were up 0.7% at EUR13.95 on Wednesday afternoon in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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