Glanbia PLC - Interim Results

RNS Number : 0760C
  Glanbia PLC
  27 August 2008


NEWS RELEASE
Glanbia Corporate Communications
Telephone + 353 56 777 2200
Facsimile + 353 56 77 50834
www.glanbia.com


2008 Half Yearly Financial Report


For a full copy of this document - go to www.glanbia.com


For further information contact
 Glanbia plc  +353 56 777 2200
 Geoff Meagher, Deputy Group Managing Director/Group Finance
 Director
 Siobhan Talbot, Deputy Group Finance Director
 Geraldine Kearney, Corporate Communications Director + 353 87
 231 9430
 Hogarth Partnership UK  +44 207 357 9477
 John Olsen / Anthony Arthur


26% growth in adjusted earnings per share on target for double digit growth in
2008


27 August 2008 - Glanbia plc ('Glanbia'), the international cheese and
nutritional ingredients Group, announces its results for the half year ended 28
June 2008. The content and structure of this announcement reflects the new
requirements for half
yearly results, under the EU Transparency Directive.

2008 Half Yearly Results Summary

* Good half year performance, with increased revenue, profits, margins and
earnings per share;
* Revenue up 6.3%, like-for-like revenue up 20%;
* Profit before tax pre exceptional up 37.6%, like-for-like profit before tax
pre exceptional up 49%;
* 10% increase in dividend per share;
* Food Ingredients USA and Nutritionals delivered strong results;
* Significantly improved performance from the Group's international joint
ventures; and
* All other divisions performed broadly in line with expectations.

                                             HY 2008       HY 2007        Change
 Revenue(1)                             EUR1,106.2 m  EUR1,040.3 m       Up 6.3%
 Operating profit pre exceptional          EUR56.5 m     EUR48.5 m      Up 16.5%
 Operating margin pre exceptional               5.1%          4.7%     Up 40 bps
 Net financing costs                      (EUR9.1 m)    (EUR8.6 m)   Up EUR0.5 m
 Share of results of joint ventures         EUR5.6 m    (EUR1.3 m)   Up EUR6.9 m
 and associates(1)
 Profit before tax pre exceptional         EUR53.1 m     EUR38.6 m      Up 37.6%
 Profit after tax pre exceptional          EUR44.1 m     EUR33.8 m      Up 30.5%
 Exceptional items(2)                     (EUR2.3 m)             -      See note
 Basic earnings per share                    13.98 c       11.47 c      Up 21.9%
 Adjusted earnings per share(3)              15.74 c       12.45 c      Up 26.4%
 Dividend per share in respect of the         2.75 c        2.50 c      Up 10.0%
 half year
 Net debt                                 EUR296.3 m    EUR269.1 m  Up EUR27.2 m

(1) Revenue including Glanbia's share of the revenue of joint ventures and
associates was EUR1.3 billion in the first half
         of 2008, up 6.5% on the same period last year. Share of results of
joint ventures and associates is an after
         interest and tax amount.
(2) In March 2008, Glanbia announced the sale of its Pigmeat business in a
Management Buyout and the net
         exceptional of EUR2.3 million is additional costs of EUR2.6 million
associated with this disposal and a related tax credit
         of EUR0.3 million.
(3) Before exceptional items and amortisation of intangible assets.

John Moloney, Group Managing Director, said:

'Glanbia had a good first half delivering strong growth relative to the first
half of 2007 and a 26% increase in adjusted earnings per share. The second half
of this year is expected to be somewhat ahead of the second half of 2007.
Margins have
recovered in Consumer Foods Ireland and there is a satisfactory outlook for
Agribusiness & Property. While organic growth remains strong in Food Ingredients
USA and Nutritionals, the performance of Food Ingredients Ireland in the second
half will be
reduced relative to the second half of 2007, as global dairy market volatility
has created a time lag in balancing input costs and market returns.
International joint ventures are expected to sustain their improved first half
performance. For the full
year, we are confident of a good overall performance and we believe the Group
will deliver double digit earnings growth, in line with market expectations.

We are delighted with the acquisition of Optimum Nutrition which we announced on
25 August 2008. Optimum has leading US sports nutrition brands and an excellent
reputation in the sector. It represents a key strategic development in the
growth of our
Nutritionals business and is expected to be earnings enhancing from this year.'


Interim management report
for the half year ended 28 June 2008


Operations review

Glanbia is organised on a geographic basis by division. For the half year 2008,
34% of Group revenue(1) and 32% of Group operating profit(1) was generated in
Ireland, with 66% of Group revenue(1) and 68% of Group operating profit(1)
generated from
international businesses.

The Group operates in the Irish market through Consumer Foods Ireland and
Agribusiness & Property. Consumer Foods Ireland incorporates nutritional
beverages, fresh dairy products and cheese, soups and spreads for the Irish
retail market.
Agribusiness is engaged primarily in feed milling, grain processing and
retailing. Property is tasked with maximising the value of the Group's property
portfolio.

International markets are served by the Food Ingredients and Nutritionals
division and international joint ventures. Food Ingredients produces cheese,
butter, casein and protein ingredients for international customers at processing
facilities in
Ireland and the USA. The Group's global nutritionals business produces a wide
range of speciality whey proteins, customised premix solutions and other
nutritional ingredients for use by food and beverage companies. The principal
Group joint ventures
include cheese manufacturers in the USA and the UK and a consumer products joint
venture in Nigeria.

(1) Share of Group including joint ventures and associates

IRELAND

 Consumer Foods Ireland* and     EUR'000                      HY 2008  HY 2007     Change
 Agribusiness & Property
                                 Revenue                      417,722  418,369    Similar
                                 Operating profit pre          21,923   20,141      Up 9%
                                 exceptional
                                 Operating margin pre            5.2%     4.8%  Up 40 bps
                                 exceptional
* In March 2008, Glanbia announced the sale of its Irish Pigmeat operations to a
Management Buyout team.

Revenue, including the Pigmeat business unit, was broadly similar at EUR417.7
million (HY 2007: EUR418.4 million). Operating profit pre exceptional increased
by 9% to EUR21.9 million (HY 2007: EUR20.1 million). Operating margin pre
exceptional grew by
40 basis points to 5.2% (HY 2007: 4.8%). These results reflect an improved
performance from Consumer Foods Ireland and a satisfactory performance from
Agribusiness & Property.

Consumer Foods Ireland
Consumer Foods Ireland had a solid first half with margins recovering as
anticipated in challenging market conditions. A key factor was the recovery in
the market place of the increased milk input costs experienced in 2007.

Outlook
The Irish food retailing sector is very competitive with changing trends in
consumer demand driven partly by the current downturn in the economy. As a
result, the strategy for Consumer Foods Ireland is threefold: reinvestment in
the business to
sustain a strong brand portfolio and relative market positions, an ongoing focus
on cost efficiency and an emphasis on product and packaging innovation. We
expect this business to sustain its improved performance for the second half,
delivering an overall
satisfactory performance for the year.

Agribusiness & Property
Revenue in this division was up compared to the half year 2007. Operating profit
was broadly similar and operating margin, excluding Property, was relatively
stable.

Agribusiness
The first half of 2008 has seen unprecedented rises in raw material prices for
feed and fertilizer inputs, relatively stable feed volumes and somewhat weaker
fertilizer volumes. Against this market environment, Agribusiness maintained its
market
position with competitive pricing and together with continued progress in the
marketplace with the CountyLife format, overall results for Agribusiness were
satisfactory in the first half.

Outlook
Going forward, the outlook for Agribusiness remains positive.

Property
The performance of the Property business unit was marginally down compared to
the first half of 2007.
Outlook for 2008 is for a similar performance to 2007, subject to the timing of
individual projects.


INTERNATIONAL

 Food Ingredients &              EUR'000                           HY 2008  HY 2007     Change
 Nutritionals
                                 Revenue                           688,455  621,968     Up 11%
                                 Operating profit pre exceptional   34,617   28,403     Up 22%
                                 Operating margin pre exceptional     5.0%     4.6%  Up 40 bps


International operations had a good first half driven mainly by a strong
performance from Food Ingredients USA and Nutritionals. Revenue increased 11% to
EUR688.5 million (HY 2007: EUR622.0 million). Operating profit pre exceptional
grew 22% to
EUR34.6 million (HY 2007: EUR28.4 million). Operating margin improved 40 basis
points to 5.0% (HY 2007: 4.6%).

Food Ingredients Ireland
Food Ingredients Ireland had a marginally improved first half performance,
compared with a weak first half of 2007. The business continues to invest
capital in product diversification as well as seeking to benefit from further
growth opportunities
from quota expansion.

Outlook
The volatility in global dairy markets experienced in the first half, which led
to a reduction in market pricing from the exceptional peak of 2007, has
continued into the second half. This is creating a time lag in balancing milk
input costs with
market returns. This timing issue, combined with increased energy costs, is
leading to a reduction in the expected performance of Food Ingredients Ireland
in the second half of the year compared to the corresponding period last year.
As a consequence,
overall results for Food Ingredients Ireland for the full year will be lower
than 2007.

Food Ingredients USA

Our leading scale position, in positive market conditions, drove revenue and
operating profit growth for this business in the first half of 2008. Sales
volume increased delivering good organic growth for cheese and whey ingredients,
both domestically
and internationally.

Outlook
Milk production to date in 2008 in Idaho continues to grow. Domestic and export
demand for American style cheddar cheese, where Glanbia is the number one
producer, remains strong. In this market context, Food Ingredients USA is
expected to deliver a
good full year performance.


Nutritionals
Revenues, profits and margins increased for Nutritionals with this business
achieving good organic growth. Nutritionals also benefited from its innovation
programme which is delivering products and solutions into the sports nutrition,
health &
wellness and weight management sectors in the USA, Europe and Asia.

Outlook
The Nutritionals business is expected to continue to perform strongly in the
second half of the year, underpinning a positive full year performance and a
growing contribution to the Group overall.

JOINT VENTURES AND ASSOCIATES

 JOINT VENTURES & ASSOCIATES     EUR'000               HY 2008  HY 2007       Change
 (GLANBIA SHARE)
 Glanbia has three principle     Revenue(1)            189,062  176,130        Up 7%
 international joint ventures;
 Southwest Cheese in the USA,
 Glanbia Cheese in the UK and
 Nutricima in Nigeria and a
 number of smaller Irish based
 joint ventures and associates
                                 Profit after            5,611  (1,308)  Up EUR6.9 m
                                 interest and tax(2)
(1) Not included in Group revenue. Like-for-like revenue grew 15%  (2) Included
in the income statement as share of results of joint ventures and associates

Glanbia's share of revenue was up 7% in the first half of the year to EUR189.1
million (HY 2007: EUR176.1 million) as these businesses continued to deliver
strong top line growth and good operational performances. Glanbia's share of
profit after tax
and interest increased EUR6.9 million to EUR5.6 million (HY 2007: EUR1.3 million
loss), driven principally by a good recovery at Southwest Cheese.

Southwest Cheese is the Group's joint venture in New Mexico and is one of the
largest natural cheese and high-protein whey processing plants in the world.
This business, now operating at full capacity, is performing well and had a very
strong first
half in 2008 leading to a significantly improved performance and a good outlook
for the full year.

Glanbia Cheese is the number one producer of mozzarella cheese for the European
pizza market. The business had an improved performance in the first half of the
year. Despite a competitive market place, results for this business for the full
year are
expected to deliver a significant improvement on a difficult 2007.

Nutricima manufactures and markets branded dairy based consumer products for the
Nigerian market. Nutricima continues to make good progress in developing its
market and brand positioning and the current expansion of the facility is on
target for
completion in the first quarter of 2009. We are steadily building a new business
in West Africa and we expect 2008 performance to be broadly in line with 2007.

Finance review

Income statement
In the first half of 2008, revenue increased 6.3% to EUR1,106.2 million (HY
2007: EUR1,040.3 million). Like-for-like revenue increased 20%. Operating profit
pre exceptional grew 16.5% to EUR56.5 million (HY 2007: EUR48.5 million).
Like-for-like
operating profit pre exceptional increased 26%. Operating margin pre exceptional
increased 40 basis points to 5.1% (HY 2007: 4.7%). These results reflect a
strong performance from the Group's international businesses, particularly Food
Ingredients USA and
Nutritionals.

Net finance costs were similar to 2007 at EUR9.1 million (HY 2007: EUR8.6
million). EBITDA (earnings before interest, taxation, depreciation and
amortisation) to net finance cost improved to 8 times compared with 7.6 times in
the corresponding period
of 2007.

The Group's share of results of joint ventures and associates, which are post
interest and tax, amounted to EUR5.6 million compared with a loss of EUR1.3
million in the first half of 2007. This improvement was mainly driven by the
performance of
Southwest Cheese.


Taxation for the period amounted to a net charge of EUR8.7 million for the first
half of 2008 compared with a charge of EUR4.8 million in the first half of 2007.
This increase reflects the growing internationalisation and profitability of the
Group.

The net exceptional charge for the half year amounted to EUR2.3 million
(compared with no exceptional charge in the first half of 2007) relating to
finalisation of the Group's exit from the Pigmeat sector. This consists of a
EUR2.6 million charge
offset by the related tax benefit of EUR0.3 million.

Basic earnings per share increased 22% to 13.98 cent (HY 2007: 11.47 cent).
Adjusted earnings per share increased 26% to 15.74 cent (HY 2007: 12.45 cent).

Balance sheet and cash flow
Overall net debt increased EUR27.2 million to EUR296.3 million, from EUR269.1
million at half year 2007. EBITDA of EUR72.9 million was reinvested in the
seasonal working capital requirement of the Group and capital expenditure.

The deficit on retirement benefit obligations improved to EUR106.9 million from
EUR114.2 million at prior year end. Improvement in the Group's obligations are
driven by improved corporate bond yields offset in part by deteriorating
investment returns
and a further strengthening of mortality assumptions in both the Irish and UK
schemes.

Dividends
The Board is recommending an interim dividend of 2.75 cent per share, compared
with a 2.50 cent per share interim dividend in 2007. This represents a 10%
increase. Dividends will be paid on 1 October 2008 to shareholders on the
register as at 12
September 2008. Irish dividend withholding tax will be deducted at the standard
rate, where appropriate.


Principal risks and uncertainties affecting the second half performance

The management of risk is key to achieving Glanbia's strategic and financial
objectives and there is an on-going process of assessing, managing, monitoring
and reporting on the significant risks faced by individual Group companies and
by the Group as
a whole. The Board has ultimate responsibility for risk management and the key
areas of risk and the Group's mitigation processes are set out in detail in the
2007 Annual Report and on the Group's website at www.glanbia.com.

With due regard to the outlook for Glanbia for the full year, the principal
risks and uncertainties that the Group has identified in the second half of
2008, which by their nature have the potential to impact the Group's full year
performance, are as
follows:
-   Short term volatility in global dairy markets may impact the performance of
Food Ingredients Ireland. The key issue will be
         rebalancing input costs with market returns
-   The global economic slowdown is affecting consumer sentiment and is leading
to a shift in trends in consumer demand and
        consumption patterns in many developed economies. If these trends are
sustained this has the potential to impact the
        Group's consumer food brand portfolio.

2008 Outlook

First half results were strong relative to the first half of 2007 and the second
half of this year is expected to be somewhat ahead of the second half of 2007.
Margins have recovered in Consumer Foods Ireland and there is a satisfactory
outlook for
Agribusiness & Property. While organic growth remains strong in Food Ingredients
USA and Nutritionals, the performance of Food Ingredients Ireland in the second
half will be reduced relative to second half of 2007, as global dairy market
volatility
has created a time lag in balancing input costs and market returns.
International joint ventures are expected to sustain their improved first half
performance. For the full year, Glanbia is confident of a good overall
performance and the Group believes it
will deliver double digit earnings growth, in line with market expectations.

The 2008 Half Yearly Financial Report is available on the Group's website
www.glanbia.com


Responsibility statement

The Directors are responsible for preparing the Half Yearly Financial Report in
accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the
related Transparency Rules of the Irish Financial Services Regulatory Authority
and with IAS
34, Interim Financial Reporting as adopted by the European Union.

The Directors confirm that, to the best of their knowledge:

The Group Condensed Financial Statements for the half year ended 28 June 2008
have been prepared in accordance with the international accounting standard
applicable to interim financial reporting adopted pursuant to the procedure
provided for under
Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of
the Council of 19 July 2002;

The Half Yearly Financial Report includes a fair review of the important events
that have occurred during the first six months of the financial year, and their
impact on the Group Condensed Financial Statements for the half year ended 28
June 2008,
and a description of the principal risks and uncertainties for the remaining six
months;

The Half Yearly Financial Report includes a fair review of related party
transactions that have occurred during the first six months of the current
financial year that have materially affected the financial position or the
performance of the Group
during that period and any changes in the related parties transactions described
in the last Annual Report that could have a material effect on the financial
position or the performance of the Group.


On behalf of the Board


    John Moloney                                Geoff Meagher
    Group Managing Director                Deputy Group Managing Director/Group Finance Director


26 August 2008


Consolidated income statement
for the half year ended 28 June 2008

                                                  Half year 2008                             Half year 2007                         
       Year 2007
                                             Pre-                                       Pre-                                      
Pre-

                                      exceptional    Exceptional        Total    exceptional    Exceptional        Total   
exceptional    Exceptional          Total
                                          EUR'000        EUR'000      EUR'000        EUR'000        EUR'000      EUR'000       
EUR'000        EUR'000        EUR'000

 Revenue                         3      1,106,177              -    1,106,177      1,040,337              -    1,040,337     
2,206,567              -      2,206,567
 Cost of sales                          (939,635)              -    (939,635)      (891,924)              -    (891,924)   
(1,882,648)              -    (1,882,648)

 Gross profit                             166,542              -      166,542        148,413              -      148,413       
323,919              -        323,919

 Distribution expenses                   (61,707)              -     (61,707)       (57,289)              -     (57,289)     
(114,180)              -      (114,180)
 Administration expenses                 (48,295)        (2,583)     (50,878)       (42,580)              -     (42,580)      
(93,905)       (23,463)      (117,368)

 Operating profit                          56,540        (2,583)       53,957         48,544              -       48,544       
115,834       (23,463)         92,371

 Finance income                  6          2,378              -        2,378          2,335              -        2,335         
4,813              -          4,813
 Finance costs                   6       (11,444)              -     (11,444)       (10,965)              -     (10,965)      
(22,095)              -       (22,095)
 Share of results of joint
 ventures and associates                    5,611              -        5,611        (1,308)              -      (1,308)           
992              -            992

 Profit before taxation                    53,085        (2,583)       50,502         38,606              -       38,606        
99,544       (23,463)         76,081
 Income taxes                    7        (9,020)            323      (8,697)        (4,790)              -      (4,790)      
(16,458)            617       (15,841)

 Profit for the period                     44,065        (2,260)       41,805         33,816              -       33,816        
83,086       (22,846)         60,240


 Attributable to:
 Equity holders of the Parent                                          40,997                                     33,599            
                          59,833
 Minority interests                                                       808                                        217            
                             407
                                                                       41,805                                     33,816            
                          60,240


 Basic earnings per share        9                                      13.98                                      11.47            
                           20.42
 (cent)

 Diluted earnings per share      9                                      13.92                                      11.46            
                           20.34
 (cent)


Consolidated statement of recognised income and expense
for the half year ended 28 June 2008


                                            Half year     Half year         Year
                                   Notes         2008          2007         2007
                                              EUR'000       EUR'000      EUR'000

 Actuarial (loss)/gain - defined      14      (1,252)        34,557      (4,539)
 benefit schemes
 Deferred tax on actuarial            14        (709)       (3,575)        1,102
 (loss)/gain
 Share of actuarial gain - joint                    -             -          230
 ventures
 Currency translation differences     13      (7,124)       (2,790)     (14,878)
 Fair value adjustments (net of       13        2,127         (943)        8,578
 tax)

 Net (expense)/income recognised              (6,958)        27,249      (9,507)
 directly in equity
 Profit for the period                         41,805        33,816       60,240

 Total recognised income for the               34,847        61,065       50,733
 period

 Attributable to:
 Equity holders of the Parent                  34,039        60,848       50,326
 Minority interest                                808           217          407

                                               34,847        61,065       50,733


Consolidated balance sheet
as at 28 June 2008


                                                              Half year      Half year         Year
                                       Notes                        2008          2007         2007
 ASSETS                                                          EUR'000       EUR'000      EUR'000
 Non-current assets
 Property, plant and equipment            10                     311,232       331,076      298,771
 Intangible assets                        10                     127,991       135,312      137,565
 Investments in associates                                        11,543        10,976       10,729
 Investments in joint ventures                                    52,317        58,731       50,370
 Trade and other receivables                                      26,895             -       13,929
 Deferred tax assets                                              20,632        20,348       21,672
 Available for sale financial                                     30,136        12,363       30,089
 assets
 Derivative financial                                              1,220         2,430          763
 instruments
                                                                 581,966       571,236      563,888
 Current assets
 Inventories                                                     283,218       164,629      225,057
 Trade and other receivables                                     286,341       288,801      202,234
 Derivative financial                                              8,685        12,173        4,990
 instruments
 Cash and cash equivalents                11                     123,738       148,891      159,819

                                                                 701,982       614,494      592,100

 Assets in disposal group held                                         -             -       20,304
 for sale
                                                                 701,982      614,494       612,404

 Total assets                                                  1,283,948     1,185,730    1,176,292

 EQUITY
 Issued capital and reserves attributable to equity holders of the
 Parent
 Share capital and share                                          97,148        98,378       98,450
 premium
 Other reserves                           13                     103,061       109,963      107,909
 Retained earnings                        14                      49,718        36,519       21,176
                                                                 249,927       244,860      227,535
 Minority interests                                                7,848         6,852        7,040
 Total equity                                                    257,775       251,712      234,575

 LIABILITIES
 Non-current liabilities
 Borrowings                               11                     419,134       417,110      379,028
 Derivative financial                                              5,180         4,655        3,736
 instruments
 Deferred tax liabilities                                         37,122        38,424       37,587
 Retirement benefit obligations           15                     106,942        83,269      114,248
 Provisions for other                     12                      12,227         8,040       13,660
 liabilities and charges
 Capital grants                                                    3,403        10,267        3,535
                                                                 584,008       561,765      551,794
 Current liabilities
 Trade and other payables                                        421,562       332,802      336,663
 Current tax liabilities                                           4,145         6,732        9,182
 Borrowings                               11                         886           854          966
 Derivative financial                                              6,112        10,476        3,187
 instruments
 Provisions for other                     12                       9,460        21,389       22,278
 liabilities and charges
                                                                 442,165       372,253      372,276

 Liabilities in disposal group                                         -             -       17,647
 held for sale
                                                                 442,165       372,253      389,923

 Total liabilities                                             1,026,173       934,018      941,717

 Total equity and liabilities                                  1,283,948     1,185,730    1,176,292


Consolidated cash flow statement
for the half year ended 28 June 2008


                                                         Half year    Half year         Year
                                                Notes         2008         2007         2007
                                                           EUR'000      EUR'000      EUR'000
 Cash flows from operating
 activities
 Cash generated from/(absorbed                     18           64      (1,732)       85,110
 by) operations
 Interest received                                           2,213        2,335        3,015
 Interest paid                                            (10,816)     (11,109)     (17,613)
 Tax paid                                                 (13,720)            -      (5,401)
 Net cash (absorbed                                       (22,259)     (10,506)       65,111
 by)/generated from operating
 activities

 Cash flows from investing
 activities
 Deferred/contingent                                      (10,729)      (7,166)     (17,742)
 acquisition consideration paid
 Purchase of property, plant                              (35,523)     (17,382)     (51,662)
 and equipment
 Purchase of available for sale                              (363)      (2,287)      (2,000)
 investments

 Proceeds received: exit from                                9,128            -       12,937
 pigmeat
 Proceeds from sale of                                         164          296       13,419
 property, plant and equipment
 Net cash used in investing                               (37,323)     (26,539)     (45,048)
 activities

 Cash flows from financing
 activities
 Proceeds from issue of                                        105           74          167
 ordinary shares
 Increase/(decrease) in                                     50,348     (61,844)     (84,056)
 borrowings
 Finance lease principal                                     (532)        (632)        (954)
 payments
 Employee share trust - LTIP                               (1,407)            -         (95)
 purchase of shares
 Dividends paid to Company's                              (10,494)      (9,946)     (17,334)
 shareholders
 Loans advanced to joint                                  (13,910)            -      (9,001)
 ventures
 Capital grants received                                     1,366            -        1,399
 Net cash from/(used in)                                    25,476     (72,348)    (109,874)
 financial activities

 Net decrease in cash and cash                            (34,106)    (109,393)     (89,811)
 equivalents

 Cash and cash equivalents at                              159,819      259,311      259,311
 the beginning of the period
 Effects of exchange rate changes on cash and cash         (1,975)      (1,027) 
    (9,681)
 equivalents

 Cash and cash equivalents at                              123,738      148,891      159,819
 the end of the period


 Reconciliation of net cash flow to movement in net
 debt
                                                              2008         2007         2007
                                                           EUR'000      EUR'000      EUR'000

 Net decrease in cash and cash                            (34,106)    (109,393)     (89,811)
 equivalents
 Cash (outflow)/inflow from                               (49,816)       62,476       85,889
 debt financing

                                                          (83,922)     (46,917)      (3,922)
 Fair value of interest rate swaps qualifying as fair        2,067            -        (764)
 value hedges
 Exchange translation                                        5,748        2,338        9,005
 adjustment on net debt

 Movement in net debt in the                              (76,107)     (44,579)        4,319
 period
 Net debt at beginning of                                (220,175)    (224,494)    (224,494)
 period

 Net debt at end of period                               (296,282)    (269,073)    (220,175)


 Net debt comprises:                                          2008         2007         2007
                                                           EUR'000      EUR'000      EUR'000

 Borrowings                                              (420,020)    (417,964)    (379,994)
 Cash and cash equivalents                                 123,738      148,891      159,819

                                                         (296,282)    (269,073)    (220,175)


Notes to the Group condensed financial statements
for the half year ended 28 June 2008


1  Basis of preparation

The figures for the half years ended 28 June 2008 and 30 June 2007 have not been
audited by the auditors. The figures for the full year ended 29 December 2007
represent an abbreviated version of the Group's financial statements for that
year, which
received an unqualified audit report.

These condensed financial statements do not constitute statutory accounts within
the meaning of Section 19 of the Companies (Amendment) Act 1986. The statutory
accounts for the financial year ended 29 December 2007 were approved by the
Board of
Directors on 4 March 2008 and contained an unqualified audit report. These
financial statements will be filed with the Registrar of Companies by their due
date.

The Group condensed consolidated interim financial statements for the six months
ended 28 June 2008 has been prepared in accordance with the Transparency
(Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the
Irish Financial
Services Regulatory Authority and with IAS 34 'Interim Financial Reporting'. The
condensed consolidated interim financial statements should be read in
conjunction with the annual financial statements for the year ended 29 December
2007, which have been
prepared in accordance with IFRS.


2  Accounting policies

The methods of computation and accounting policies adopted in the preparation of
the Group condensed financial statements, except for an amendment in the Group's
segment information disclosure under IAS 14 'Segment Reporting', are consistent
with
those applied in the Annual Report for the financial year ended 29 December 2007
and are described in those financial statements.

The Group did not adopt any new International Financial Reporting Standards or
Interpretations in the period that have had a material impact on the Group
condensed financial statements for the half year.


3  Segment information

At 28 June 2008 the Group is organised into two main business segments:
-   Ireland
-   International

                                             Half year    Half year         Year
                                                  2008         2007         2007
                                               EUR'000      EUR'000      EUR'000

 Turnover by business segment

 Ireland                                       417,722      418,369      803,363
 International                                 688,455      621,968    1,403,204


                                             1,106,177    1,040,337    2,206,567


 Operating profit pre exceptional by
 business segment

 Ireland                                        21,923       20,141       30,640
 International                                  34,617       28,403       85,194


                                                56,540       48,544      115,834

The Group's internal financial reporting system reports performance by two
business segments, Ireland and International.
Segment information has been restated to include Consumer Foods and Agribusiness
& Property into Ireland, and Food Ingredients and Nutritionals under
International.
The comparative information for both the half year and year end 2007 have been
restated.


4  Seasonality

Within the Ireland segment, seasonal buying patterns impact the weighting of
Agribusiness & Property revenues towards quarters one and two of the financial
year. International revenues are impacted by the seasonal pattern of milk supply
in
quarters two and three of the financial year.

The increase in working capital for half year 2008 versus year end 2007 of
EUR68.3 million was primarily driven by the above seasonal patterns.


5  Exceptional items

                                  Half year     Half year        Year
                                        2008         2007        2007
                         Notes       EUR'000      EUR'000     EUR'000


 Exit from Pigmeat         (a)       (2,583)            -    (20,756)
 Restructuring cost        (b)             -            -     (2,707)
                                     (2,583)            -    (23,463)

 Exceptional tax credit                  323            -         617

 Net exceptional item                (2,260)            -    (22,846)


(a)  On 3 March 2008, Glanbia announced the sale of its Pigmeat business in a
Management Buyout and the net
          exceptional of EUR2.3 million is additional costs of EUR2.6 million
associated with this disposal and a related tax credit
          of EUR0.3 million.

(b)  Restructuring of Consumer Foods operations. Costs include redundancy and
asset impairment charges.


6  Finance income and costs

 (a) Finance income
                                              Half year    Half year        Year
                                                   2008         2007        2007
                                                EUR'000      EUR'000     EUR'000

 Interest income                                  2,378        2,335       4,813

 (b) Finance costs
                                              Half year    Half year        Year
                                                   2008         2007        2007
                                                EUR'000      EUR'000     EUR'000

 Interest expense
 - Bank borrowings repayable within five        (9,025)      (6,220)    (19,084)
 years
 - Bank borrowings repayable after five               -      (3,480)           -
 years
 - Interest cost on deferred consideration        (228)        (202)       (450)
 - Finance lease costs                            (155)        (156)       (272)
 - Interest rate swaps, transfer from               154          716       1,401
 equity
 - Interest rate swaps, fair value hedges       (1,539)        (737)         676
 - Fair value adjustment of borrowings            1,539          737       (676)
 attributable to interest rate risk

                                                (9,254)      (9,342)    (18,405)

 Finance cost of preference shares              (2,190)      (1,623)     (3,690)

 Total finance costs                           (11,444)     (10,965)    (22,095)


7  Income taxes

The Group's pre exceptional income tax charge of EUR9.0 million (HY 2007: EUR4.8
million) has been prepared based on the Group's best estimate of the weighted
average tax rate that is expected for the full financial year.


8  Dividends

A final dividend in respect of the year ended 29 December 2007 of 3.58 cent per
share was paid during the period. On 26 August 2008, the Directors declared the
payment of an interim dividend for 2008 of 2.75 cent per share (2007 interim
dividend: 2.50
cent per share). The interim dividend will be reflected in the financial
statements for the full year 2008 in line with IAS 10.


9  Earnings per share

 Basic
                                         Half year      Half year           Year
                                              2008           2007           2007
                                           EUR'000        EUR'000        EUR'000

 Profit attributable to equity              40,997         33,599         59,833
 holders of the Company

 Weighted average number of ordinary   293,252,086    292,984,514    293,012,540
 shares in issue

 Basic earnings per share (cent per          13.98          11.47          20.42
 share)


 Diluted

 Weighted average number of ordinary   293,252,086    292,984,514    293,012,540
 shares in issue
 Adjustments for share options           1,355,427        254,170      1,110,557

 Adjusted weighted average number of   294,607,513    293,238,684    294,123,097
 ordinary shares

 Diluted earnings per share (cent per        13.92          11.46          20.34
 share)


 Adjusted

 Profit attributable to equity holders of the       40,997    33,599    59,833
 Company
 Amortisation on intangible assets                   2,888     2,886     5,946
 Exceptional items                                   2,260         -    22,846

                                                    46,145    36,485    88,625

 Adjusted earnings per share (cent per share)        15.74     12.45     30.25

 Diluted adjusted earnings per share (cent per       15.66     12.44     30.13
 share)


10  Property, plant & equipment and intangible assets

During the six month period to 28 June 2008 the Group spent EUR35.5 million
(2007: EUR17.4 million ) on additions to tangible and intangible fixed assets.
The Group also disposed of certain assets with a carrying amount of
EUR1.1million (2007: EUR0.2
million) for proceeds of EUR3.7 million (2007: EUR4.3 million). At 28 June 2008
the Group had entered into contractual commitments for the acquisition of
property, plant and equipment amounting to EUR14.3 million (2007: EUR2.2
million).


11  Net debt

                                   Half year    Half year         Year
                                        2008         2007         2007
                                     EUR'000      EUR'000      EUR'000

 Borrowings due within one year          886          854          966
 Borrowings due after one year       419,134      417,110      379,028
 Less:
 Cash and cash equivalents         (123,738)    (148,891)    (159,819)

                                     296,282      269,073      220,175

The increase in net debt of EUR76.1 million from year end 29 December 2007 was
primarily driven by the Group's capital expenditure and seasonal working capital
requirements.


12  Provisions for other liabilities & charges

                                                       UK
                                 Restructuring    pension       Other       Total
                                       EUR'000    EUR'000     EUR'000     EUR'000

 At 29 December 2007                     6,284      3,845      25,809      35,938
 Charged to the consolidated
 income statement
 - Additional provisions                   582          -           -         582
 Net amounts (credited)/charged        (2,383)         85    (11,857)   
(14,155)
 to provision
 Exchange differences                        -      (270)       (408)       (678)

 At 28 June 2008                         4,483      3,660      13,544      21,687


 Non-current                                 -      3,660       8,567      12,227
 Current                                 4,483          -       4,977       9,460

                                         4,483      3,660      13,544      21,687


(a)  The restructuring provision relates primarily to the exit from Pigmeat
operations and rationalisation within
          Consumer Foods operations. This provision is expected to be fully
utilised in the remainder of 2008.
(b)  The UK pension provision relates to administration and certain costs
associated with pension schemes relating to
          businesses disposed of in prior years.
(c)  Included in 'Other' above are provisions in respect of property lease
commitments, deferred consideration in
          respect of recent acquisitions, insurance and certain legal claims
pending against the Group. It is expected that
          EUR5.0 million of this provision will be utilised in the remainder of
2008, with the balance being utilised over the
          next 5 years.


13  Other reserves

                                 Capital and
                                     mergers     Currency    Fair value
                                    reserves      reserve      reserves      Total
                                     EUR'000      EUR'000       EUR'000    EUR'000

 Balance at 29 December 2007         116,934     (22,481)        13,456   
107,909

 Translation differences on                -      (7,124)             -    (7,124)
 foreign currency net
 investments
 Revaluation of interest rate              -            -            63         63
 swaps - gain in period
 Foreign exchange contracts -              -                      3,848      3,848
 gain in period
 Transfers to income statement
  - Foreign exchange contracts             -            -       (1,677)    (1,677)
  - Interest rate swaps                    -            -         (154)      (154)
 Revaluation of forward                    -            -           660        660
 commodity contracts - gain in
 period
 Revaluation of available for              -            -         (130)      (130)
 sale investments - loss in
 period
 Deferred tax on fair value                -            -         (483)      (483)
 adjustments
 Cost of share options                   149            -             -        149

 Balance at 28 June 2008             117,083     (29,605)        15,583    103,061


14  Retained earnings

                                             Retained     Goodwill
                                             earnings    write-off       Total
                                              EUR'000      EUR'000     EUR'000

 Balance at 29 December 2007                  114,137     (92,961)      21,176

 Actuarial loss - defined benefit             (1,252)            -     (1,252)
 schemes
 Deferred tax on actuarial loss                 (709)            -       (709)

 Net expense recognised directly in           (1,961)            -     (1,961)
 equity
 Profit for the period                         40,997            -      40,997

 Total recognised income for the half          39,036            -      39,036
 year 2008

 Dividends paid in 2008                      (10,494)            -    (10,494)

 Balance at 28 June 2008                      142,679     (92,961)      49,718


15  Changes in estimates and assumptions

The following actuarial assumptions have been made in determining the Group's
retirement benefit obligation for the half year ended 28 June 2008:


                  Half Year 2008       Year 2007
                   IRL       UK     IRL      UK
 Discount rate    6.3%      6.8%    5.5%    6.0%

The mortality assumptions imply the following life expectancies in years of an
active member on retirement at age 65:

                 Half Year 2008                        Year 2007
         Irish mortality    UK mortality    Irish mortality    UK mortality
              rates            rates             rates            rates

 Male         19.5              23.3             18.9              20.8
 Female       22.5              26.0             21.9              23.9


16  Related party transactions

The Company is controlled by Glanbia Co-Operative Society Limited ('the
Society') which holds 54.63% of the issued share capital of the Company and is
the ultimate parent of the Group.

During the six months to 28 June 2008, sales to related parties amounted to
EUR44.3 million (2007: EUR31.3 million) purchases from related parties amounted
to EUR252.7 million (2007: EUR200.9 million) and net balances owing, to/(due
from) related
parties were EUR12.7 million (2007: EUR20.1 million). The related party
transactions relate primarily to trading between the Company, a key joint
venture Southwest Cheese and the Society.

In the opinion of the Directors, there have been no related party transactions,
or changes therein, since year ended 29 December 2007, that have materially
affected the Group's financial position or performance in the six months ended
28 June 2008.


17  Contingent liabilities

Bank guarantees, amounting to EUR5.3 million (2007: EUR14.2 million) are
outstanding as at 28 June 2008, mainly in respect of the payment of EU
subsidies. The Group does not expect any material loss to arise from these
guarantees.


18  Cash generated from operations

                                            Half year    Half year       Year
                                                 2008         2007        2007
                                              EUR'000      EUR'000     EUR'000

 Profit before tax                             50,502       38,606      76,081

 Development costs capitalised                      -            -     (1,804)
 Non-cash exceptional - exit from                 954            -      13,706
 Pigmeat
 Share of results of joint ventures and       (5,611)        1,308       (992)
 associates
 Depreciation                                  13,151       14,938      27,246
 Amortisation                                   3,301        2,340       6,816
 Cost of share options                            149          201         587
 Difference between pension charge and        (6,979)      (7,034)    (10,876)
 cash contributions
 Gain on disposal of property, plant and      (2,556)      (4,079)     (3,002)
 equipment
 Interest income                              (2,378)      (2,335)     (4,813)
 Interest expense                              11,444       10,965      22,095
 Amortisation of government grants              (132)        (393)       (736)
 received

 Cash generated from operations before         61,845       54,517     124,308
 changes in working capital
 Change in net working capital
  - Increase in inventory                    (61,126)     (20,204)    (82,093)
  - Increase in short term receivables       (90,741)    (124,721)    (36,615)
  - Increase in short term liabilities         93,080       95,786      78,649
  - (Decrease)/increase in provisions         (2,994)      (7,110)         861

 Cash generated/(absorbed by) operations           64      (1,732)      85,110


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

  END

IR DBGDISSDGGIL