Glanbia to divest cheese joint venture, reports record earnings growth

DUBLIN (Reuters) - Irish firm Glanbia is to divest its cheese joint venture for more than 160 million euros ($170 million) as it moves to focus on its core business of sports nutrition and ingredients after reporting record annual earnings growth.

The move comes a year after activist investor Clearway called for a major restructuring including the disposal of the cheese joint venture and the spin-off of its performance nutrition unit.

Shares in the company, which on Wednesday reported its highest annual earnings per share (EPS) growth at 17.6%, were up 3.4% at 0850 GMT. It said it expected EPS growth to slow to 5-10% in the current year.

Glanbia said it had signed a non-binding agreement with partner Leprino Foods to divest its interest in Glanbia Cheese for an initial cash consideration of more than 160 million euros with an additional consideration of up to 25 million euros over three years, dependent on business performance.

"The logic of this transaction is clear as it allows us to focus on our core better nutrition strategy and to allocate further capital to our global growth businesses," Managing Director Siobhán Talbot said in a statement.

Last year the firm agreed to sell its 40% share in Ireland's largest dairy processor for 307 million euros.

Glanbia will report its earnings in dollars in its 2023 financial year, but has "no plans at this time" to move its listing in London and Dublin to the United States, Finance Director Mark Garvey said.

Clearway had called for the spinning out the company’s performance nutrition unit and establishment of a dual-listing in New York and Ireland.

The company's focus will be to scale up its nutritional solutions business and to leverage that scale, Garvey said.

($1 = 0.9397 euros)

(Writing by Conor Humphries; editing by Jason Neely)