Aryzta shares jump despite continued revenue decline

Shares in Cuisine de France owner Aryzta have jumped over 4% despite ongoing problems in its US business dragging first-quarter group revenues down by 5.5%.

The Irish-Swiss baked goods producer said revenue for the three-months to the end of October came in at €909.7m. The fall was chiefly driven by a 11.5% slump in north American revenue.

However, underlying US organic revenue, excluding Cloverhill, was up 1%.

The Illinois-based bakery has lost business on the back of shipping product to retailers in direct competition with its customers.

“The business challenges are unchanged from those outlined in September. Europe continues to perform to expectation, including Germany, with broadly- based growth across the region offsetting planned Swiss in-sourcing,” said chief executive Kevin Toland.

“Progress at Cloverhill, in north America, is proving difficult. Management’s priority is to continue to identify issues and opportunities to address operating performance and to maximise available free cash flow,” he said.

Aryzta shares were up by over 4% yesterday and still being viewed as good value by analysts largely down to a better-than-expected quarter and the outlook for full-year earnings not to have the same kind of slump they did last year.

“We are encouraged by a return to growth in Europe and a US business that achieved underlying growth, excluding Cloverhill, for the first time in 12 quarters,” Davy said. “Guidance implies that management expects business to steady up after a significant decline in earnings before interest, tax, depreciation, and amortisation reported in 2017,” said Merrion’s Darren McKinley.


More in this Section

Dublin Airport sees record numbers in 2018

Ireland West Airport expecting busiest period in its history this month

Record year for Tourism Ireland with 11.2m visitors in 2018

No rush for ECB to hike rates


Lifestyle

Making Cents: Planning for your financial future

Dive right in for Christmas swim in aid of a good cause

In the frame during a big year for comics

Musical theatre review: Les Miserables

More From The Irish Examiner