Glanbia forecast it would return to earnings growth this year, and unveiled a E50m fillip from a pensions shake-up, helping shares in the Irish dairy group gain 4%.

Glanbia, a major cheese supplier to McDonalds and Burger King as well as Europe's biggest manufacturer of mozzarella for pizzas, repeated a forecast that underlying 2009 earnings would come in at about E30-31 a share, down from E0.35 a share a year before.

However, trading conditions had "improved somewhat" in late 2009 thanks to upticks in the global dairy market and the US cheese market.

"Based on current economic and dairy market forecasts, [managers] expect a return to earnings growth in 2010 in the order of 6-8%," the group said.

Job cuts 

The group's 2009 performance was dented by a cluster of factors, including the strength of the euro, which reduced the group's competitiveness in the UK, while improved the attractions of British imports on the Irish market.

Glanbia's agribusiness division was dented by the farming downturn, while the Dairy Ireland commodity processing business is expected to post its first ever loss because of the weak dairy market.

Glanbia said it was to undertake a "further significant cost reduction programme" at the business this year, and would book a E15m charge in 2009 results to account for the cost of implementing job losses.

Shares rise 

The company said it also faced an E18m non-cash charge relating to the repayment of intergroup loans.

However, thanks to a cut of E50m in pension liabilities, the company would see its 2009 results boosted by a post-tax credit of E17m overall.

Analyst Paul Meade at NCB said the update and 2010 guidance was "in line with" the Irish broker's expectations, and restated a "buy" rating on Glanbia shares.

"We remain optimistic that Glanbia will outperform its guidance on the expectation that Dairy Ireland will do better than just break even [in 2010] as assumed in our forecasts."

Glanbia shares to E2.98 in early deals in Dublin before losing some ground to close up 2.4% at E2.917.