Glanbia shares fall sharply in wake of first-quarter results

Shares in Glanbia fell sharply on Wednesday 24 April after the company posted first-quarter results showing a double digit decline in sales volumes in its performance nutrition business. Glanbia shares dropped more than 6% to close out trading on Wednesday at €16.35 – the company’s weakest share price in over two months. At one stage on Wednesday Glanbia shares traded as low as €16.23.

The sharp fall in the share price followed first-quarter results announced on Wednesday morning by Glanbia. Although first-quarter revenues were up 8.4%, this was mainly driven by recent acquisitions, which added almost 10% to revenues.

Glanbia’s performance nutrition division, which comprises its portfolio of sports nutrition brands, delivered first-quarter revenue growth of just under 5%.

Worryingly, however, the business saw double digit declines in sales volumes of almost 17% and price declines of more than 3%. This was only offset by the acquisition of Slimfast in 2018, which added 25% to revenues.

Salary

At Glanbia’s AGM held on Wednesday, more than a fifth of the company’s shareholders (21.3%) voted by proxy against a proposal to award pay increases to Glanbia managing director Siobhan Talbot and finance director Mark Garvey.

Following the 2018 financial year, the remuneration committee of Glanbia recommended that the base salary of Siobhan Talbot be increased from €860,000 to €1.05m per annum as part of a new three-year deal to stay at the company. This equates to a pay rise of 22%.

The committee also recommended the base salary of Mark Garvey be increased from €505,620 per annum to €581,000 – a 15% pay rise.

However, Institutional Shareholder Services (ISS) and Glass Lewis, two firms which provide independent advice to investors around corporate governance, have both advised investors in Glanbia to reject the salary increases for both Talbot and Garvey.

In response to the rump of shareholders who voted against the pay increases, Glanbia said it would engage with shareholders in order to understand the reasons behind the proxy votes against the proposal to increase executive salaries.