Farmers set for increased payout as Glanbia increases dividend

Following its eighth year of double-digit earnings growth, the board of Glanbia is to revise the group’s dividend policy. It has put in place a target annual dividend payout of between 25% and 35% of adjusted earnings per share. The increase reflects the strength of Glanbia’s balance sheet, profits and cashflow.

For 2017, the board is recommending a final dividend of 16.09 cent per share, which brings the total dividend for the year to 22.00 cent per share, a 65% increase on the prior year.

This total dividend represents a return of €65m to shareholders from 2017 earnings and a payout of 25% of 2017 pro-forma adjusted earnings per share.

2017 performance

Glanbia reported profits (EBITA) up 3.6% to €283.2m for 2017, driven by its performance nutrition business which saw profits increase by 4.8% to €169m. Revenue from its fully owned businesses increased 7% to €2.4bn. On a constant currency basis, revenues were up 9.2%.

Revenues increased 13.7%, while volumes increased 7.1% as a result of branded revenue growth. The company said that the acquisitions of Amazing Grass and Body & Fit drove a revenue growth of 8.1%. Net prices declined 1.5%. Margins fell from 16.1% to 15.1%, with the company blaming higher input costs and increased brand investment.

Its ingredients business reported a 3.4% growth in revenues to €1.3bn, driven by a 3.9% growth in volumes along with 1.5% increase in prices. Earnings (EBITA) increased 2% versus the prior year.

The company reported challenges in the US cheese market. Currency dragged overall performance by 2.2%. Earnings per share increased 10.2% on the prior year.

There were strong results for the year from its joint ventures, including its 60% share in Glanbia Ireland, with share of profits pre-exceptional of €42.8m, up 65%, primarily driven by higher dairy markets and volume growth.

Siobhán Talbot, group managing director, said growth was broad based across all divisions, with good volume growth across all segments.

She added recent acquisitions and the disposal of its share of Dairy Ireland demonstrate the ambition of the group to build on its existing strengths, drive future sustainable growth and deliver on its vision to be one of the world’s top performing nutrition companies.

She added that the focus in 2018 will be on volume-driven revenue growth.

She said the outlook for 2018 is positive and she expects Glanbia to deliver between 5% to 8% growth.

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Farmers set for increased payout as Glanbia increases dividend