Glanbia has said that its Consumer Products division faced 'significant headwinds' in the first three months of the year, according to an Interim Management Statement issued this morning.
'The Irish retail environment remains challenging despite a modest improvement in consumer sentiment,' the company said. 'The drive to value, through ever-increasing promotional activity alongside rising own label incidence is impacting margins for both supplier and retailer.'
Glanbia is seeking to deliver cost savings in its Consumer Products division this yea through a cost rationalisation programme. It added that plans for a new Ultra Heat Treated (UHT) plant is 'a positive development to extend our product portfolio outside Ireland and will enhance the long term growth potential of the business'.
Overall, Glanbia described its outlook for the year as positive, with its revenue in the three months to April growing by 17%, compared to the same period last year. This was comprised of 7% volume growth, 9% pricing growth and enhanced product mix and 1% related to acquisitions.
"Glanbia delivered a good performance in the first three months of 2014," said Siobhán Talbot, Group Managing Director. "Global Performance Nutrition performed particularly well reflecting very strong revenue growth in both the USA and internationally, supported by the ongoing investment in the business. The results across the rest of the Group were as expected.
"Performance in Global Ingredients in the period was behind the prior year as lower milk throughput in Idaho reduced output of cheese and base whey; Dairy Ireland continued to be challenged while Joint Ventures & Associates' performance was ahead year-on-year. Overall the outlook for the remainder of the year is positive and we maintain our guidance of 8% to 10% growth in adjusted earnings per share on a constant currency basis."