Glanbia Share Discussion Threads

[giardap] 02/8/2006 17:24

Buy now on merger/takeover potential

[m.t.glass] 02/2/2005 08:37

This Email Alert service is brought to you by Glanbia PLC

RNS Number:0844I
Glanbia PLC
02 February 2005


Glanbia plc and Dairygold Co-operative Society Limited
Joint Announcement


Glanbia to take on CMP brand.

Milk Processing Co-operation Agreement.

Glanbia plc and Dairygold Co-operative Society Limited today (2 February 2005)
confirm that, subject to the approval of the Irish Competition Authority,
Glanbia will operate the CMP liquid milk, cream and juice branded business of
Dairygold. The consideration is Euro10.05m.

This development includes the relevant sales and distribution assets of CMP but
excludes the production and chill facility. Under the new arrangement
Dairygold's 130 liquid milk suppliers will continue to supply Dairygold and
Dairygold will sell the 6.15m gallon CMP liquid milk pool on to Glanbia.

Glanbia will continue to supply the CMP milk, dairy and juice brands into the
Cork area, including continuing CMP door-to-door deliveries.

In addition Glanbia and Dairygold have also confirmed that they have agreed in
principle to enter into a contract manufacturing arrangement for elements of
their respective milk processing activities. This is subject to finalisation of
contract negotiations, which are ongoing. Once finalised the arrangement is
designed to enhance capacity utilisation, as well as maximise scale and
efficiency for both parties as advocated by the recent Prospectus report.

Under the terms of this agreement Dairygold will supply a volume of cream to
Glanbia annually, beginning in 2005, for the contract manufacture of Dairygold
branded butter and butter oil at Glanbia's Ballyragget butter production
facility. In addition Glanbia will purchase a volume of whey from Dairygold for
processing.

Glanbia will supply Dairygold a volume of milk for contract manufacturing into
Glanbia dairy products at Dairygold's Mitchelstown plants, from 2006 onwards.

As appropriate both parties will make capital investments in their respective
facilities and both parties will continue to maintain their own existing
separate commercial arrangements with milk suppliers and customers.

Commenting, Glanbia plc Group Managing Director, John Moloney, said:

"This development regarding the CMP brands and the contract manufacturing
agreement with Dairygold are in line with Glanbia's strategy of maximising scale
and efficiency in the most appropriate way. The CMP brands will further
strengthen Glanbia's Consumer Foods' customer offering as one of Ireland's
leading suppliers of chilled foods and beverages to the retail and food service
sectors. Likewise the contract manufacturing agreement is consistent with our
strategy of developing further industry alliances and co-operation to achieve
mutual efficiencies. Glanbia has a long track record of co-operation with other
processors, including Dairygold, and we view this mechanism as a sensible way
forward for the industry."

Mr Jerry Henchy, Dairygold Chief Executive, said:

"The decision to exit the liquid milk business was not taken lightly but in
light of the highly fragmented nature of the sector, growing volumes of imported
milk and the downward price pressure exerted by the multiples on the margins
that can be achieved, it is the right business decision for Dairygold and its
liquid milk suppliers. The Glanbia Dairygold co-operation agreement is a very
positive move in the Irish dairy sector. Calls for consolidation of the industry
have been made for many years, but progress to achieve meaningful
rationalisation has been slow. This is partly because the route to
rationalisation was generally perceived as being through takeovers or mergers.
We have developed a pragmatic solution where we will be happy to co-operate with
neighbours where appropriate to share facilities and production assets to
contract manufacture dairy products as cost-efficiently as possible".


Ends
2nd February 2005



For reference:

Glanbia plc
Geraldine Kearney
Director of Corporate Communications
Telephone: [phone] Mobile [phone]

Dairygold Co-operative Society Ltd
Pat Keating
Keating and Associates
Telephone : [phone] Mobile [phone]


This information is provided by RNS
The company news service from the London Stock Exchange
END

AGRSSIESFSISELE

[m.t.glass] 31/1/2005 14:41

Got out of that last problem, by getting out of Glanbia.

[m.t.glass] 27/1/2005 02:11

Dave Jon - as I daresay you've sussed already by now - the switch to euro pricing (10 Jan) wasn't just a glitch but turns out to permanent. Same with PAP. Confuses my valuations having these differing currencies mixed up in my portfolio!

[m.t.glass] 27/1/2005 02:05

This just came in from the Hong Kong edition of China daily. Glanbia is featured:



Irish food moves into mainland
JIANG JINGJING,China Business Weekly staff
2005-01-27 08:28


Pig tails, feet and internal organs...?

Westerners may think they are the worst and cheapest parts of a pig for eating, compared with the pig's belly or ham hock.

But for Chinese, these parts can be made into some of the most delicious dishes on a Chinese table.

Some Irish citizens see this as a business opportunity, and want to begin exporting their meat products to China.

The two countries signed a protocol on pork trade last Tuesday.

Irish Prime Minister Bertie Ahern said the agreement is "a watershed in the active initiation of trade in meat products between the two countries."

The Irish side will take this step further in the future in relation to Irish beef, Ahern said at the Seminar on Irish Food and Drinks in Beijing.

China bans beef imports, due to BSE (bovine spongiform encephalopathy) cases that have been reported in some Western countries.

Philip Carroll, director of meat policy under the Irish Department of Agriculture and Food, said the successful co-operation on pork between the two countries will extend to beef when the ban is lifted.

He said a series of discussions, seminars and field trips will be carried out in the coming years.

On this visit, 30 Irish business people from 20 companies came to China in a bid to seek business opportunities.

Ireland is sending out its biggest foreign trade mission to China, Carroll said.

Many Irish enterprises have seen market potential from their experiences in Hong Kong, and say they are more excited to be able to tap the market of 1.3 billion citizens, Carroll said.

Speaking of the advantages over other European meat exporting countries, Carroll said Ireland's pleasant environment offers the possibility of abundant natural products.

"Ireland is not a industrialized country. Our great geographical characteristics, fresh air and clean water guarantee the quality of our products," he said.

Irish Agriculture Minister Mary Coughlan stressed on the food safety system in the country. "We comply to the European Union (EU) standards. All our guarantees are measurable, comparable, internationally benchmarked as well as being scientifically verifiable," she said.

John Madden, chief executive of Glanbia Meats, one of the largest pork producers in Ireland, said the company will begin business with lower-valued products in China.

"Pig tails, feet and internal organs are profitable in China due to the different diet, compared to the European market. While we export pig bellies to Europe, there is still a huge amount of lower-valued products available. We aim to seek a balance in our production and sales," he said.

Glanbia Meats exports 10 thousand tons of meat to Japan and six thousand tons to Hong Kong annually.

"We hope to shift the six thousand ton export from Hong Kong to the mainland, since the profit there is even higher," Madden said.

The company currently has two agents in China.

"If the business goes smoothly, we will think of introducing a production base in China," he said.

Madden hopes the company can take the advantage of these early opportunities and develop the Chinese market.

"The price of imported low-end products are about 20 to 30 per cent cheaper than domestic products, which attracts foreign companies to the market," said Li Shuilong, chairman of the China National Meat Association.

Statistics from the association indicate China imported 640,000 tons of meat and exported 470,000 tons in 2003. Since China only exports high-end products and imports mainly low-end products, the trade surplus reached US$120 million.

Other food products

Irish food exports to China were close to 20 million euros (US$27.2 million) last year, but Carroll pointed out the figure itself marked the very substantial rate of growth in trade in the past three years.

Although meat products are a major focus of Ireland's current efforts to establish trade links with China, the country already has a very active dairy products and drink sector traded in China.

"We also export fish, and a consistent pattern of growth in trade with China has developed in recent years. We would like to see a major expansion in these areas in the future," Carroll said.

Ireland, an EU member, is an agricultural country, with 4.5 million hectares devoted to agriculture. The nation's livestock numbers 4.5 times greater than population, and more than 80 per cent of the livestock are exported.

The output of agriculture and food amounts to 15 billion euros (US$20.4 billion), accounting for 10 per cent of the country's gross domestic products.

[davejon] 10/1/2005 14:56

ADVFN have apparently switched today to displaying the Glanbia share price in euro (monitor/trades/portfolio screens. Is this an admin slip, or is it going to continue? Anyone know?

[m.t.glass] 07/1/2005 12:03

And for comparison with other foodies..




(2004 GLB up 34%, CWK 59%, ITF 55%, RFD 54%)

[m.t.glass] 07/1/2005 11:50

Despite the pension concerns and other doubts expressed above, it still ended 2004 up by a third.

[dames] 26/11/2004 15:37

yep , see u around wipo :0)

[wipo1] 26/11/2004 11:03

I am out as well now, could not resist the profit! Nervous about this pension fund black hole and the price was failing to stay above 200p. Probably fully valued now?

Keeping on me watch list.

[wipo1] 23/11/2004 15:54

The graph still looks good, I am keeping me small holding for now!

[dames] 23/11/2004 13:29

Thanx for info , our trailing stop loss kicked in at 195p so we are out now.

Good luck to those left.

Dames

[hypocrite] 23/11/2004 10:03

Easy.......Davy's published a few lines explaining it....milk supplies
across Europe......quotas havent been achieved.

I would be a seller despite this........

Easy also.....read Moneybags.....Glanbia consistently ignore
and refuse to recognise the £100 million black hole in their
pension fund.......much less how they are going to deal with it!!!
If they had to announce plans to write off 100m what would the
share price fall to?
Allowing that the figure is only 60 million lower than their
bank borrowings????

Caveat Emptor....

[dames] 19/11/2004 20:31

Still no idea for the rise though?????

[wipo1] 19/11/2004 20:10

Hi Dammes, nice to see someone else in, I have been in and out a few times, from 120p,150p, bought a few at 170p as well. Banked most of me profits, maybe I should have kept them? Oh well such is life!

[dames] 19/11/2004 17:15

My club are in this one , been a nice rise over the last couple of days as you say .
Couldnt tell you why though , Euro doing well against the Dollar maybe?

No news to say either way , still, got a nice tight 2% stop loss in place now seeing as we were in at 140p.

Be seein ya

Dames :0)

[wipo1] 19/11/2004 10:23

Hi Hypocrite, are you still in? Not much newsflow on this one, wonder why the price is up? Any ideas?

[wipo1] 18/11/2004 15:09

Looks like a breakout now, glad I never sold out all me holding.

[wipo1] 03/11/2004 22:44

Thanks for the info hypocrite, I sold some of me shares today, only have a small amount left. Did ok out of this one, pity about the 1% stamp duty and witholding tax on the dividends, but i can't complain!!!

[hypocrite] 20/10/2004 20:24

Six months later...things going from bad to worse....Moneybags damns
it again.....especially with the opening £100 million pension deficit...
very much a sore topic these days in the UK.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Avoid Glanbia at €2.60
JOHN MOLONEY has now been running Glanbia for four
years and in that time he has written off circa €300 million,
with €104 million accounted for last year – an expensive way
to exit its UK sliced meat business. In this year's interim
report Glanbia has, for the first time in a while, not recorded
any write-offs but the company is carrying a €100 million
pension black hole – a problem that Moloney does not even
mention. In the short term, Moneybags' recommendation (see
The Phoenix 7/5/04) to "get out of Glanbia at €2.73" still holds,
with the shares now down to €2.60.
In the first half of the current
year and adjusting for the sell-off
of its huge UK cheese business,
adjusted sales are up 9% to
€974m but operating profits fell
12% to €40m and trading
margins slipped back 30 points
from 4.4% to 4.1%. This setback
doesn't seem to fit with
Moloney's statement in last
year's report that "in 2004
growth will be achieved", or last
year's review by the chairman,
Tom Corcoran, which noted
that "the board expects to make
further progress in the current
year". Shareholders must hope
that Corcoran is right that
"developments commenced in
2003, together with planned
initiatives in 2004, will deliver
satisfactory earnings growth in
2005 and beyond".
IDAHO EXPANSION
This optimism is based on the
current $27m expansion
programme in Glanbia's big,
Idaho, cheese and whey plant,
which is expected to be fully
operational later this year.
Additionally, Corcoran is hopeful
that the $20m skimmed-milkpowder
plant, which is currently
being built in Nigeria in a 50%
joint venture with the UK
Cussons Group, will also boost
the bottom line.
More important, however, is
the huge, $190m cheese and
whey plant on which work is
starting in New Mexico. This is a
50% joint venture with the local
co-op, Dairy Farmers of
America. The big, Idaho cheese
plant has Glanbia already
positioned as the fourth largest
American Cheddar cheese
operator but an additional
110,000 tonnes of cheese from
the New Mexico plant will push
Glanbia up to the number one
position.
The big question does not
concern Glanbia's capacity to
bring this plant on stream as
planned in 12 months' time
(October 2005) but rather how
the company is going to market
this huge increase in its
production of US Cheddar
cheese, particularly given its
record on this side of the
Atlantic.
Glanbia had to get the
American Leprino Foods to run
its big mozzarella cheese plant in
Northern Ireland, not just on the
production side but also to help
it market mozzarella cheese on
the continent. Surprisingly, this
was despite the fact that Glanbia
had already tied up a deal with
McDonald's as its preferred
European cheese supplier.
While the Leprino deal was
done just before Moloney
became md, in February of this
year, he sold off Glanbia's big UK
cheese business, recording an
exceptional write-off of €49m.
When you consider that this
British cheese operation was the
second largest producer of both
Cheddar and Stilton cheese in
Britain, it is hard to understand
how a failure of this scale could
instill confidence in Glanbia's
ability to triple its US Cheddar
cheese business.
While overall group
operating profits in the first half
fell 12%, Glanbia's foodingredients
business performed
well, with sales up 20% to
€514m and operating profits up
an even more substantial 49% to
€20m. This returned an 80 point
increase in trading margins from
3.2% to 4%, but still a very low
return.
The main ingredient in this
uptake was the recovery in the
group's US cheese business,
which had suffered badly in the
preceding year due to severe
price competition. With
increased capacity coming on
stream last june, this progress
will be boosted when further
capacity comes on stream later
this year.
Back home on the consumerfood
side, however, Glanbia had
a disastrous first half with pro
forma profits more than halved
down to €10m, although trading
margins still came out at 4.6% –
ahead of the US business. What
is worrying about this division is
that its liquid-milk monopoly in
Leinster continues to generate
substantial profits, leaving John
Moloney to blame "difficult
trading conditions in the fresh
pork
Moloney sold off Glanbia's
British pork and fresh-meat
operations, shareholders
naturally assumed that this was
part of a greater plan for the
group's pork business,
particularly as Moloney is
spending a lot of money
increasing the capacity of
Glanbia's Roscrea and Edenderry
pig-slaughtering facilities.
OVERCAPACITY
Surprisingly, Moloney now
says that problems in the pigmeat
trade "have been
compounded in recent years by
overcapacity and inefficiencies in
production". If this is true, it is
difficult to know what strategy
he has been adopting for the last
four years. It looks as if the new
management in Dairygold –
which in less than a year has
completely restructured its
Galtee pig-meat operation – has
a better handle on this business.
Given the reduction in
earnings in the first half, even if
there is some recovery in the
second, it is unlikely that Glanbia
will be able to do much more
than slightly top last year's fullyear
earnings and possibly push
these up from 19.3 cent to 20
cent. If this latter is achieved,
this will leave the shares at the
reduced price of €2.60 on a
prospective 13 p/e, a high rating
given the very poor record
Glanbia has had over the last
seven years.
It could be that John Moloney
knows what he is doing and the
big, $190m New Mexico joint
venture will start earning
significant profits from the day it
opens at the end of next year.
However, this still means that
Glanbia will not be earning a
penny here until 2006. Avoid
Glanbia shares at €2.60 until the
reality of Moloney's performance
John Moloney
THE PHOENIX October 22, 2004 33

[wipo1] 23/5/2004 11:04

Hi Hypocrite,

I sold most of me holding a few weeks ago for 176p, as I was in not a bad profit and felt the time was right to bank. I have kept some of me shares, but not in a rush to add at the moment!

[dames] 06/4/2004 17:06

Have I missed something in the last few days , why the sudden rise?

Dames