Aryzta shares pare huge losses as baker starts on overhaul

Shares in Aryzta fell more than 7% at one stage yesterday before sharply paring losses, as the troubled Irish-Swiss baked goods company said it plans to accelerate its management shake-up.

Driven by its North American operations, group revenues dropped 2.8% to just over €1.9bn for the six months to the end of January.

Earnings before interest, taxes and amortisation slumped over 31%, to €158.5m, its interim results statement showed.

Chief executive Owen Killian, chief financial and operating officer Patrick McEniff and its Americas chief executive John Yamin will now depart Aryzta at the end of March, having originally been scheduled to stay until July.

It named David Wilkinson as its interim chief financial officer. A senior partner at KPMG in Dublin, Mr Wilkinson joins Aryzta on secondment as the company starts the process of recruiting a new chief executive and permanent chief financial officer.

Aryzta said it had reduced its financing costs by €26m and that it had continued to generate cash of €99m.

The company said it was not in a position to provide full year guidance.

It has been a turbulent year for the company, whose shares plummeted by 32% in a single day in January after it issued a profit warning ahead of the interim results.

Some €1.2bn was wiped off the company’s market value.

The company has lost nearly two-thirds of its share value in the past two years as investor confidence in its management team eroded because of falling earnings and unpopular investment choices.

After the sharp morning sell-off, the shares pared their losses to end about 1% lower on the day, valuing the company at around €2.64bn.

Analyst Darren McKinley at Merrion Capital said the sharp share price slide in early trading yesterday had been overdone, citing new chairman Gary McGann’s track record in managing companies and the potential over the next year for the company’s fortunes to improve.

Davy Stockbrokers said earnings were below its expectations, primarily due to weaker-than-expected margins in Europe.

“Given the scale of change, it is no surprise the board of Aryzta is not in a position to provide guidance,” Davy analyst Cathal Kenny said.

Based in Zurich, Aryzta has operations in North America, South America, Europe, Asia, Australia and New Zealand.

It’s best known here for its Cuisine de France brand.