Shareholder UBS hits out at Aryzta trading performance
Published 05/07/2015 | 02:30
Owen Killian's €4.3bn-valued frozen bakery company Aryzta has been a "disappointing stock call" over the last number of months, according to an equity analyst at global investment bank UBS, which owns 2.7pc of the group.
Aryzta's share price has fallen sharply since March and is hovering around a 30-month low. Company chief Owen Killian has been one of the best paid Irish executives in recent years.
One of the reasons for the drop has been an earnings hit caused by the removal of low-volume products from the company's production lines in North America.
Though the move was disruptive, the idea was that Aryzta would benefit from making more products for larger customers.
UBS analyst Joern Iffert said the bank's initial view was that there would be a near-term recovery in volumes, but UBS now believes it may have been wrong. Last month, an Aryzta spokesman told the Sunday Independent that they expect US revenue growth to return to the previous level in the "coming quarters".
"We now lack visibility on a fast turnaround and see a risk that Aryzta's strategy of customer/product replacements is not paying off near term," Iffert said in a note after Aryzta's last trading update.
Iffert said that, despite the UBS disappointment, its view on Aryzta's "strong fundamental asset base" remained unchanged.
"Aryzta has top modern production sites differentiating itself in a less-developed bakery industry offering market share gain prospects... the company should be a cost leader and is positioned in the most attractive bakery channel."
Sunday Indo Business