A change in the company structure could be on the way in Glanbia, according to industry sources.

Some have suggested this could happen sooner rather than later.

Glanbia Co-op chair John Murphy announced at the AGM in June that he is open to looking at options and said he had appointed a board subgroup to look at options.

Speaking to the Irish Farmers Journal this week, Murphy said: “We appointed specialist advisers in July to have a thorough review of the business.”

Joint venture

Glanbia Ireland is a joint venture between Glanbia Co-op (60%) and Glanbia plc (40%).

The thinking suggested by some industry sources is that Glanbia Co-op would reduce its 31.5% shareholding in Glanbia plc to fund an increasing ownership stake in Glanbia Ireland. In the last year the Glanbia plc share price has increased significantly, bringing the value of the co-op stake in the plc towards the €1.4bn mark. The plc share price dipped to a low of €9 in October 2020, and has hovered over €15 in September 2021.

This week Murphy poured cold water on any immediate change. He said, “Look, when you appoint advisers obviously rumours start. No decision has been taken.

“Our advisers on this piece of work, KPMG, are due to deliver an initial report very soon to the co-op board.”

I am ambitious for farmers and ultimately farmers own this business

When pushed on what structure might emerge, with some talk that the 31.5% stake in the plc would be reduced to less than 10%, Murphy was non-committal: “The business is evolving and continues to evolve.

“I am ambitious for farmers and ultimately farmers own this business so we would have to consult with farmers before making any change.”

Profits

Under the current structure of Glanbia Ireland a net profit after tax of about €60m has been established in the last two years which reflects the agreed profit after tax margin Glanbia Ireland must make for its shareholders. Half of this goes for reinvestment and the other half (c€30m) is divided proportionately to its shareholder parents so circa €18m to the co-op and €12m to the plc.