Aryzta shares slump on fears for European sales

Revenues at food company Aryzta climbed by more than 13% to over of €970m over the three months to the end of April despite flat trading in one of its core markets.

Underlying revenue growth declined by 2.3% in the period but was more than offset by acquisitions which provided a 3.1% bounce and growth from currency movements of 12.4%.

Shares in the Swiss-Irish firm fell by more than 8% yesterday afternoon after the release of the company’s trading update.

Commenting on the figures, Aryzta chief executive Owen Killian said: “As anticipated, underlying revenue declined in North America by 6.7% in the quarter and this trend is expected to continue through Q4.

“Food Europe has yet to recover in Switzerland where the consumer economy has suffered since the removal of the currency peg in January and in France due to security concerns in the quarter.”

Revenue from its European operations rose 4.7% to €405.9m in the period with underlying growth and currency movements offsetting the negative impact of disposals. In March, Aryzta cut its stake in Origin Enterprises by close to 60% by disposing of 49m shares in the Irish company and from which Aryzta raised €404m.

Consequently, the remaining 29% share in Origin will be presented as discontinued operations during the current and prior comparative periods, up until the transaction date and as an associate interest thereafter.

Accordingly, Origin revenues are no longer consolidated within the group’s result or included as part of yesterday’s trading update.

The group’s new earnings per share guidance of 400c is significantly lower than analysts’ forecasts.