the global nutritional solutions and cheese group, today
announced that John Moloney, group managing director, has notified the board
that he wishes to retire by the end of 2013, having been due to retire in 2014.
Siobhán Talbot, group finance Director, has been appointed as John Moloney's
successor. She will become group managing director designate from June 1, 2013
to ensure a smooth transition of the leadership of the Group.
Talbot joined Glanbia
1992 and is a fellow of the Institute of Chartered Accountants in Ireland.
Moloney said he feels that after 12
years at the helm and over 25 years with the group, it is the ''right time'' for
all concerned to pass the leadership of the company to someone new.
Greencore, the UK-listed company,
that mainly operates in the UK and US, today reported half year revenues of
£572.9m sterling, up 0.9% on the same time last year. Group operating profits
for the six months to the end of March rose by 6.3% to £33.7m and earnings per
share increased by almost 11%.
Patrick Coveney, Chief Executive
Officer, commented: “We have made good progress on our
strategic agenda during the first half of the year, despite the fact that market
conditions throughout the period proved very challenging. In the UK, we have
completed the Uniq integration with the restructuring of the desserts business
and the disposal of the Minsterley facility, and the integration of
International Cuisine is progressing well. In the US, MarketFare and Schau have
been integrated and, since the end of April, we are supplying Starbucks from
four of our six facilities there.
However the UK retail environment remains under severe pressure and this was
exacerbated in Q2 by the horsemeat scandal, which has temporarily driven the
ready meals market lower."
Results detail [pdf]
Liam Igoe of Goodbody commented:
"Greencore’s headline results were ahead of our forecast (+8.9% in EPS terms).
The key positive variances were in operating profits (both Convenience Foods and
Ingredients & Property) and interest. As expected, lfl sales in the UK were
negative (-1.3%) arising from the impact of the horsemeat scandal on sales of
ready meals. Other UK food divisions were mixed in terms of lfl sales but
positive overall. US sales more than doubled to reflect the acquisitions last
year and the initial roll-out of products into Starbucks.
Overall, the impact of the horsemeat scandal was
less than feared. Chilled meals H1 sales from Greencore increased by 10.7% on a
headline basis because of the International Cuisine business but fell 5.9% on an
lfl basis, with the fall concentrated in the January-March period. Quiche
performed well within Prepared meals with growth in excess of 4.5%. The largest
division, Food to Go, saw flat sales in the period (+0.1%) in a generally slower
growth market (broader food-to-go -0.2%). Grocery & Frozen foods saw revenue
increase 4.5% due in part to increased sales to discounters, though Cakes &
Desserts fell 2.9%.
Sales in the US more than doubled in H113. There
has been a sea-change in this business over the past year consisting of: (i)
further streamlining of the legacy supermarket business by the elimination of
loss-making lines; (ii) the acquisitions of Schau (for $17m on June 21 2012) and
Marketfare (for $36m on April 17 2012) and (iii) the new $50m Starbucks’
contract. Greencore has now rolled out its product offering into over 1300
Starbucks’ outlets in the US (some 12% of its US estate). Sales to these outlets
are targeted to deliver $50m in sales in FY14.
While Greencore’s H1 EPS was well ahead of our
forecast, the UK market environment remains difficult. However modest lfl sales
growth in the core UK market is likely, partly due to easier (weather-related)
comps. Nevertheless our assumed 2% lfl growth for the year may not be exceeded.
We are unlikely to make any material changes to our forecasts and expect to
retain our forecasts at EPS level, therefore, at 13.8p."
All eyes looking to Bernanke and the Fed
tomorrow to add some much needed stimulation; Yen remains the main focus, helped
by an about-turn from Japan’s economy minister partially retracting yesterday’s
Justin Doyle, Investec Bank Ireland, said today:
- "FX markets remained extremely quiet over
the past 24 hours with volumes in the bottom 50th percentile for the past 12
months. All eyes looking to Bernanke and the Fed tomorrow to add some much
- Of note was Chicago Fed’s Charles Evans
speaking yesterday, in which he was thought to strike a more dovish tone
than usual. While he expects to see 'self-sustaining (U.S.) growth' at
"escape velocity" in 2014, he did add that the Fed is missing on both
inflation and employment targets and he wants to see further asset purchases
until the job market improves. Two more FOMC voters speak today in the form
of St Louis Fed’s Bullard and the NY Fed’s Dudley;
- In terms of currencies, the Yen remains the
main focus, helped by a familiar about-turn from Japan’s Economy Minister
Mr. Amari partially retracting yesterday’s comments on JPY: ‘can’t say when
correction from strong Yen will end’ versus 'correction of the strong Yen is
largely complete' the previous day!
- In the UK today the only show in town is the
CPI, PPI & RPI, all out at 09:30 with a 0.1% increase in CPI expected to
0.4% mm leaving it still above target in the medium term."
Economic View: International tax
spotlight on Ireland; Dermot O'Leary, chief economist
of Goodbody, comments - - "An uncomfortable spotlight will continue to be shone
on Ireland today as the international debate on corporate tax practices of large
multinationals intensifies. There is no suggestion that anything illegal is
occurring but companies located in Ireland are being repeatedly mentioned in
structures that aim to minimise the amount of tax paid in countries such as the
UK and the US. Some of the companies mentioned are large employers in Ireland.
Last week, the spotlight centred on Google’s
operations in the UK in a Parliamentary Committee hearing. Today, Apple Chief
Executive, Tim Cook, will testify in front of the Senate sub-committee on how
they manage to pay little tax on their international operations. In a report,
released yesterday ahead of the hearing, two Irish subsidiaries are mentioned as
key to the whole process, while, according to the Irish Times, the report claims
that Apple has negotiated a tax rate of 2% with the Irish Government. We find
this point hard to believe, but it may be the case that the company is using a
series of tax structures to reduce the effective rate of tax that it pays.
Deficiencies and loopholes in international tax
law have allowed companies to use these types of structures to minimise their
tax bills. Indeed, tax avoidance has been around for decades. Nevertheless, the
scale of attention that it is now receiving from various committees, the
European Commission and even the G8 is greater than ever before.
From Ireland’s point of view, these companies
have very legitimate operations with thousands of employees located here.
However, the tax practices have had the effect of legitimately inflating sales
in these Irish operations. Although, the tax benefits to the Irish government
have been small, this has had an effect on the headline macro statistics.
Ireland is keen to highlight that it has a transparent tax regime, but the
recent international attention is threatening that image. This story has more to
Apple has special Irish tax rates; 'Stateless'
companies based in Ireland
Banks 1: Q1 mortgage drawdowns 26%
lower; Eamonn Hughes and Colm Foley of Goodbody
comment - - "The Irish Banking Federation (IBF) published its Q1 mortgage
drawdowns dataset yesterday, showing €331m of drawdowns in the quarter, down 26%
yoy. Whilst mover-purchaser loans were down 14% yoy in the quarter, First-Time
Buyer loans were down 29% yoy. The strong decline in the latter would tally with
the strong growth in Q412 lending on the expiry of mortgage interest relief in
the last Budget, which may well have drawn forward business from the opening
quarter of 2013. Nevertheless, the IBF indicates in its accompanying statement
that lenders are reporting a healthy pipeline of interest and it anticipates
this to be reflected in the April approvals data which is due to be published
Data from the property register shows that the
value of transactions for Q113, currently at €873m, is 7% ahead of the same
quarter last year. This suggests that the proportion of cash purchases has
increased to c65% of transactions in Q1 from c46% in the final quarter of 2012
and 50% for the same quarter last year. Underlying momentum remains positive in
volume terms, transactions up 12% on the same period last year, although they
are 50% lower than Q42012 further emphasising the distorting impact of the
expiration of mortgage interest relief at the end of 2012.
Recent approvals data had been guiding to a lower
drawdowns figure for the quarter, however, a 26% decline is still a material
retracement. Our mortgage assumptions have growth of €1bn for 2013, so the Q1
performance is already starting to provide a bit of a headwind to that
assumption. So we will need to see a reasonable pick-up in approvals in Q2 to
get our estimates back on track."
Bank of Ireland: Some UK customers to
avoid mortgage rate increase; Eamonn Hughes added - -
"BOI indicated a few months ago that it was set to raise mortgage rates for
customers on trackers in its UK operations, with some customers potentially set
to see rates charged move from 1.75% over base to 3.99%. The move came into
effect this month. The moves were set to impact about 13,500 of the bank’s UK
customers, though we note reports in the UK Times this morning that the bank has
relented on c.10% of the customers impacted.
It appears that about 1,000 customers have been
reprieved by the small print in their contracts whilst about 200 customers who
had switched mortgages were not informed of the increases and will not now be
The re-pricing of the UK mortgage loan book last
summer added an estimated 12bps to the overall group net interest margin this
year. The additional re-pricing this year, whilst on a smaller number of
clients, was at a relatively steep spread increment. Any reprieve for customers
will not be welcomed by the bank, but overall the impact is immaterial in a
Banks 3: PTSB chairman leads by example;
Eamonn Hughes and Colm Foley of Goodbody further add - - "Permanent TSB is due
to host its AGM tomorrow. While we understand there won’t be any accompanying
IMS statement, we note commentary this morning (Irish Times) that the chairman
and the bank’s non-executive directors are set to take 10% cuts in their annual
fees from the start of next month, front-lining the group’s efforts to reduce
its remuneration bill by 8%. The CEO is to take a reduction in his pension
contributions and the staff have already been informed that the bank intends to
wind down its defined-benefit pension scheme.
In recent months, the government produced a
report that recommended that remuneration across the banking sector was required
to be reduced by 6-10%. Permanent TSB pitched its own target at 8%. The
announcement by the board, leading by example, presumably sets the tone of the
discussions between staff and management."
Irish mortgage lending falls back in
first quarter of 2013: Conall Mac Coille, chief
economist of Davy comments - - "Stock markets had a relatively quiet day on
Monday, with few macroeconomic data releases. The Euro Stoxx 50 closed up 0.2%
and the S&P500 down -0.1%. Irish mortgage lending in Q1 2013 was just €331m, a
fresh low. However, this follows the €1bn surge in Q4 2012 as borrowers rushed
to take advantage of mortgage interest reliefs. The expiry of those reliefs at
end-2012 meant lending was always likely to fall back in Q1.
Stock markets had a relatively quiet day on Monday, with few economic data
releases. The Euro Stoxx closed up 0.2% and the S&P500 down -0.1%. The Chicago
Fed National Activity index fell, holding back risk appetite and the US dollar.
The euro is currently trading at just under $1.29, off recent lows. However, US
ten-year bond yields are currently trading at 1.965%, close to recent highs.
Data released by the Irish Banking Federation yesterday showed new mortgage
lending falling to a fresh low of €331m in Q1 2013. This is a 26.4% decline
compared with Q1 2012. However, new lending was €1.0bn in Q4 2012 as borrowers
rushed to avoid the expiry of mortgage interest reliefs. So lending was always
likely to fall back sharply in early 2013.
A better comparison is to look at total lending through the last six months,
smoothing through the volatility created by the end of interest relief. In
aggregate, mortgage lending in Q4 2012 and Q1 2013 was €1.3bn, compared with
€1.1bn in the same period through the turn of 2012/2013. So mortgage lending is
up 22% over the past six months, albeit from an exceptionally low base.
The cooling-off period in early 2013 may also be evident in the Irish house
price index, which fell 2% in Q1 2013, following a 0.8% rise in Q4 2012. Dublin
house prices rose 2.6% in Q4 2012, but fell back by 0.7% in Q1 2013. Looking
forward, mortgage lending should rebound as the year progresses. In aggregate,
Irish banks’ targets suggest that mortgage lending should equal around €4bn in
2013. But this target now looks ambitious following just €331m of lending in Q1.
Banks may not have fully factored in the drop-off in mortgage demand in early
2013, due to the expiry of mortgage interest relief, into their expectations for
lending in the calendar year."
The Dow fell 19 points or
0.12% Monday to 15,335.
The S&P 500 and Nasdaq both
The MSCI Asia Pacific Index of shares fell 0.2%
Tuesday from the highest level since June 2008.
The Japanese Nikkei 225
rose 0.13% and Shanghai Composite Index gained 0.20%; Kospi 200 index dipped
0.07%; Australia's ASX/S&P 200 dropped 0.56%; in Mumbai, the Bombay Stock
Exchange the S&P BSE India Sensex Index declined 0.56%.
In Europe, the
Dow Jones Stoxx Europe 600 is down 0.41% in early afternoon trading Tuesday.
In Dublin, the
ISEQ is down 0.50%.
Glanbia has fallen 1.76%. Greencore is up 5.51% in London.
Key Index Performance
Bank of Ireland Daily Report
The euro is
trading at $1.2861 and at £0.8484.
For live currency updates, check the right-hand
column of the Finfacts home
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry
a measure of shipping costs for dry commodities,
hit an all-time High of 11,771 on the 21st of May, 2008.
From that time it reversed and on the 5th of December, 2008 it hit a low of 663
- - close to a 1986 low.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 0.537%, to 1,700 points,
On Monday, the
BDI fell 5 points or 0.69 to 836.
Crude oil for June 2013 delivery is currently
trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $96.29 down 42 cents from Monday's close. In London, Brent for July delivery
is trading on the
International Commodities Exchange at
$104.13. The North Sea
benchmark accounts for two-thirds of the global market.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.
Gold spot price
The spot price
of an oz of gold is trading on the
CME in Chicago at $1,379.00 down $5.40 from Monday's closing.
Gold had hit a
record high of $1,921.05 a troy ounce on Sept 06, 2011.
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