Aryzta shares climb as revenue soars despite poor EU growth
Published 29/11/2011 | 05:00
SHARES in specialist bakery Aryzta climbed yesterday after the company said trading in the first quarter had followed expected forecasts and announced increased credit facilities.
The stock closed up 2.41pc at €34 after the Irish-led firm reported first-quarter revenues of €692.6m -- an increase of 9.6pc year-on-year. Underlying revenue climbed 4.4pc.
Revenue including agri-services firm Origin Enterprises topped €1bn.
Chief executive Owen Killian said the company was sticking to its full-year forecasts of 338c per share, describing them as "valid".
The group's European food operations were the slowest growing sector, adding only 1.2pc in turnover.
That compared unfavourably with North America which gained 6pc, while revenue from the rest of the world soared 14.7pc. Europe and the US account for some 93pc of the company's business.
Aryzta said the increased prices during the period were "due to recovery of higher raw material prices and weaker volumes".
In yesterday's statement, the Swiss-based firm added it had extended its banking facilities from €488m to €789m and extended the length of the facility to 2016.
"The capacity increase reflects Aryzta's strategy to match the size of the facility with growth in the business, while the extended maturity is deemed prudent given the current uncertainty surrounding financial markets," said the company.
The announcement had few surprises for the markets, with analysts broadly optimistic about the company.
NCB's Darren Greenfield was pleased with the statement but warned about the performance in Europe.
"Food Europe looks to be experiencing significant volume falls and we would hope to see these volume falls level out when pricing becomes more stable in the second half of the year," he said.
Davy's John O'Reilly focused on the price rises that supported the volume growth.
"If industry data is a reliable proxy, then pricing is the key driver of growth.
"Industry data would also suggest that pricing actions continue to be necessary to offset input cost headwinds, although the pass-through nature of its food service business makes it difficult to estimate how much may be required," he claimed.