Glanbia revealed a strategic review, "to prioritise growth opportunities", as it unveiled its first results statement since selling control of its historic Irish dairies division, and foresaw "good" prospects for 2013.

The cheese and ingredients group said that it had "clarified" its outlook by in November disposing of most its stake in the dairy business, which is now focused on exploiting an expected hike in Irish milk production following the abolition of European Union quotas.

The business, now booked as an associate company to Glanbia, is planning to boost its milk processing capacity by 60% through a E170m investment programme.

Glanbia said the deal had reduced its "overall exposure to global dairy markets, and potential earnings volatility", a factor which analysts said had been holding back the group's stockmarket rating.

'Strategic roadmap'

Glanbia said it was not reviewing its long-term strategy, to form a "strategic roadmap" for the next decade, in which it would assess the "growth potential" within the remaining operations.

"We are in a stronger position than ever to capitalise on the competitive advantages we have in high growth markets," the company said.

"Our focus in 2013-14 will be to refresh the group's strategy so that we prioritise growth opportunities in terms of a long-term plan, and focus our investment on the areas of highest potential growth and returns."

The group highlighted the potential for its "well-established" operations selling ingredients and nutritional products, based largely on dairy-based ingredients.

Indeed, Glanbia said it was to "develop and evaluate" potential acquisitions, "with a focus on the nutritional businesses".

Profits rise

The comments came as the group unveiled a 22% rise in underlying earnings per share for 2012, on revenues up 14.4% at E2.21bn.

At 56.56 euro cents, earnings per share beat market expectations of a 53-cents-per-share result, and reflected "strong" performances in ingredients and nutritional products, with the US cheese business held back by lower average prices over the year.

Glanbia forecast growth of 8-10% in earnings per share in 2013, from a base level of 51.02 cents per share factoring in the dairy disposal, implying a result in line with the 56 cents a share that investors are forecasting.

"The prospects for 2013 are good, although we remain cautious given the global environment," chief executive John Moloney said.

The group forecast lower prices of many dairy raw materials, such as lactose and "high end" whey, despite the firming in industry commodity prices as evident at the latest GlobalDairyTrade auction.

Market reaction

The statement was welcomed by Dublin stockbroker Davy, which said that "Glanbia could not have begun its strategic transformation in better style, with stronger-than-expected growth in 2012 and a positive growth expectation for the current year and thereafter".

The broker restated an "outperform" rating on Glanbia shares.

NCB said the results were roughly 3% ahead of expectations, and said that guidance of earnings growth this year "reflects confidence in a continued strong performance in global nutritionals despite the current environment".

The broker also said that "future earnings should suffer lower volatility following the dairy spin-off", noting that Glanbia shares are trading at about 15.3 times this year's earnings, compared with a sector average of 16-17 times.

Glanbia shares closed 1.4% lower at E8.38 in Dublin.