Glanbia (LSE: GLB) moved modestly higher on the back of its latest trading details, the stock last up 1% from the mid-week close. But share picker appetite would no doubt have been stronger in the absence of the broader risk aversion currently sweeping world markets.
The food group continued to see revenues soar during January-June, it announced, the top line swelling 11.5% to €2.05bn. On a constant currency basis this was up 9.9% year-on-year.
As a result it saw EBITA soar 9.2% to €192.8m. The company advised that the sale of its 60% stake in Dairy Ireland and the division’s related assets last month had been classified as discontinued operations in the firm’s half-time numbers.
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Chief executive Siobhán Talbot said: “Glanbia Nutritionals and Joint Ventures were the main drivers of growth in the first half and we believe second half earnings progression will also be driven by Glanbia Performance Nutrition where good organic growth is expected for the remainder of the year.”
Sales at Glanbia Nutritionals leapt 9% at stable exchange rates in the first half, while revenues at Joint Ventures and Associates increased 23.2% from the corresponding 2016 period.
And growing global demand for sports nutrition products also underpinned the strong first-half sales performance — the top line at Glanbia Performance Nutrition grew 5.4% in the period at constant currencies.
Talbot added that the Irish business remains on course to report pro-forma adjusted earnings per share growth of 7%-10% on a constant currency basis.
On the right path
The City certainly believes Glanbia is on course to keep earnings on an upward tilt, the company supported by an improvement in dairy markets and robust demand across the business. As such, bottom line rises of 6% are chalked in for both 2017 and 2018 respectively, although today’s sunny update may prompt an upgrade of these forecasts.
While dealing on a forward P/E ratio of 18.9 times, I reckon the Kilkenny company is worthy of a slight premium.
Rest easy
InterContinental Hotels Group (LSE: IHG) is another stock expected to deliver chunky bottom-line growth in the near-term and beyond.
In 2017, the global hotelier is predicted to deliver an 18% earnings improvement, and to follow this up with a 6% advance next year. And given the prospect of further rises in the coming years, I reckon InterContinental is also a terrific pick regardless of its slightly-heady forward P/E reading of 22 times.
The Buckinghamshire business saw revenues at constant exchange rates continue to chug higher in the first half, up 4% year-on-year to $788m, it announced last week. This underpinned a 7% rise in underlying operating profit which clocked in at $365m.
While the business saw REVpar (or revenues per available room) rise 2.1% in the period, this slowed to 1.5% in the second quarter from 2.7% in the prior three months, thanks in no small part to the impact of a later Easter on its US hotels — REVpar here fell 0.4% during April-June.
However, I believe the broad strength of the economy Stateside should push revenues here higher again sooner rather than later. And with InterContinental also continuing to make progress in Europe and China, I think the business remains a great share for those seeking excellent long-term growth.
