The chairman of Irish-Swiss foods firm Aryzta has said he is unsure he would have taken on the job if he had realised the challenges facing the troubled business.
Gary McGann, who is also chairman of Paddy Power, said it would be a “multi-year turnaround” for Aryzta, which has lost around 84% of its stock market value in the past year.
The Cuisine de France owner, which also makes burger buns for McDonald’s, had been hampered by underperformance in the US and investor ire at the lack of certain asset disposals.
A contentious near €800m rights issue with the funds to be used to lighten Aryzta’s then debt of €1.5bn and strengthen its balance-sheet was narrowly approved by shareholders in November.
Shares in the firm rose more than 6% yesterday, with the firm valued at just over €1.1bn.
Mr McGann, speaking at the Pendulum Summit event in Dublin, said: “I like a challenge but I am not a masochist. I knew there were plenty of challenges, I knew the nature of the challenges. The challenges were far greater than any of us had considered. I’d like to think I’d be brave hearted and go in, but maybe not, I don’t know. But I’m in, and once I make a commitment, then I make a commitment.”
Mr McGann said chief executive Kevin Toland, who was appointed over a year ago, was the right man to turn around the business.
He said Aryzta has “great products, assets, and people right around the globe”.
“But it is a multi-year turnaround. It wasn’t a one-year event to get to where we are, and it is not going to be one year to get out of it,” Mr McGann said.
On Paddy Power and the gambling industry’s ability to make inroads in the US, Mr McGann said: “For the industry, America has huge potential. They are sports mad, and there is a huge amount of sports betting going on for years and years that wasn’t legal. This is an already established pattern there. The population and the mindset is such that there is enormous business opportunity.”
He cautioned, however, that “there are a lot of players and a lot of mouths to feed” in relation to many rivals in the US market, adding that regulation, taxes, and competition from casinos would be a major challenge.
“There is a lot to play for and a lot of complexities, but we believe we position ourselves very well. There is no straight-line formula as to how this is going to play out,” he said.
Mr McGann said the gambling industry “has to get better” at dealing with vulnerable customers susceptible to addiction, but called for more legislation to do so.
“The industry is a very broad-based landscape, from Plcs to large private chains. Arguably the biggest company in the world, bet365, is totally privately owned. Plcs can’t fix the world on their own... there is no point unless you get some legislative support.
“There is no point in me throwing someone out of my pub if they are going to go next door and still have the problem,” he said.
Mr McGann said he had been pushing successive governments to bring in more gambling controls and a regulator.
“We need a rules system. We need legislative support.”
Mr McGann also criticised the State holding shareholding in commercial companies, saying the “Government is a bad shareholder”.