Glanbia shares hit 20-month highs on Wednesday morning following the announcement of stronger than expected performance in 2018.

The shares touched off €18 for a period and are one of the top performing shares on the Irish stock exchange in the past year – up 20% in the past 12 months.

Shares in the global nutrition group previously hit highs of almost €20 in March 2017 on the announcement that it was selling its agribusiness and consumer foods business to its joint venture with the co-op.

Shares have seen a period of volatility over the last two years, which had seen them fall below €13.50 last April. The co-op’s shareholding, which now owns 31.5% of the plc, is valued at almost €1.7bn.

Financial performance

The share price surge comes on the back of stronger than expected performance in the company’s 2018 financial numbers, particularly in the latter half of the year.

The group reported 9% adjusted earnings per share growth, which was at the higher end of its guidance.

Revenues in its fully owned businesses increased 4.1% to €2.4bn on the prior year, while profits (EBITA) increased 5.2% to €284.9m. Margins increased 10 basis points during the year to 11.9%. The group saw a 6.7% growth in volume, while prices declined 4.7%. Acquisitions contributed 2.1% to growth.

The group this week also announced it is to acquire US-based non-dairy ingredient solutions business, Watson, for $89m

During the year, the company completed the acquisition of SlimFast for $350m.

Its share of profits from its joint ventures, which include Glanbia Ireland and Glanbia Cheese, increased by €2.5m to €45.3m in 2018.

The group this week also announced it is to acquire US-based non-dairy ingredient solutions business, Watson, for $89m. In 2018, Watson delivered $101m in revenue.

Watson specialises in vitamin and mineral pre-mix solutions and edible films for customers in the food, nutrition, supplement and personal care categories. Watson has over 300 employees across three production facilities in Connecticut and Illinois.

Performance nutrition

Its performance nutrition business reported revenue growth of 9.5% to reach €1.2bn.

This was driven by strong volume growth of 9.1% with branded like-for-like volume growth of 9.2%. Acquisitions drove revenue growth of 4.5%. Prices declined 4.1%.

The company said in order to maintain and drive volumes against the backdrop of currency headwinds in key markets, it continued to invest in the brand and promotions.

It said the rate of pricing decline moderated in the fourth quarter.

Profits (EBITA) in its performance nutrition business increased 6.7% to €173.1m in 2018. Margins fell from 15.1% to 14.7% as a result of tariff costs, foreign exchange headwinds and brand investment, according to the company.

In November, Glanbia completed the acquisition of SlimFast for $350m. SlimFast delivered a strong performance in 2018 and grew its full-year revenue by 17% to $247m.

Glanbia Nutritionals

Total revenues in this division decreased 0.6% to €1.2bn as volume growth of 4.6% was offset by price decline of 5.2%. Volume growth was largely driven by Nutritional Solutions and price decline related primarily to lower dairy markets.

Profits in the division improved 3% to €111.8m, with margins increasing to 9.3% from 9%.

Its US cheese business saw volumes increase 1.7% offset by a 4.8% fall in prices with the result that revenues declined 3.1% to €680m.

The group noted that its Irish joint venture, Glanbia Ireland, delivered a good performance in 2018 driven by a 5.1% growth in milk supply to 2.7bn litres which more than offset price declines as a result of lower year-on-year dairy markets.