Profit warning issued

8 September

TROUBLED Irish food group Glanbia issued a profits warning this week, blaming problems in its UK meat and food service sectors for a serious under-performance in the first half of the year.

These difficulties are continuing and have more than offset a satisfactory performance in the groups other businesses, said a statement. Consequently the out-turn for 2000 will be below current market expectations.

The UK sliced cooked meats business was hit by the shortage of pigs leading to higher raw material prices. Food services also suffered from stronger competition, and retail cheese was damaged by the strength of sterling.

Profits from continuing operations were down almost 30% in the six months to July 1, to Ir19.3m (15m) on an 11% reduced turnover. To soften the blow to Irish farmers, who own over half the company and saw their share values slide another 10% on Wednesday, Glanbia also announced a 3p/gal rise in its milk price.

But the move was branded insufficient by the Irish Farmers Association, which says Glanbia is still out of line with other co-ops.