Shares in Aryzta take a hit as revenue plummets
Published 28/09/2010 | 05:00
SHARES in bakery giant Aryzta slipped yesterday after the company reported increased annual profits but on much lower revenue.
The Irish-led company, which counts Cuisine de France among its brands, saw their share price fall nearly 3pc to €33 despite their results being broadly in line with expectations.
The company said that operating profit increased by 2.2pc to €305m on the back of revenue that declined by 8.6pc to €3.01bn. Those figures translated to an increase in diluted earnings per share by 4pc to €2.44. The dividend has increased slightly to 36.6c.
As had been the case earlier in the year, Ireland and the UK were the worst-performing markets, while revenues were stable elsewhere in Europe.
In North America, the trading environment was described as weak, with price cuts for consumers remaining key.
Chief executive Owen Killian said that economic conditions would remain "very challenging" but pointed to recent acquisitions that he claimed would help the company improve its performance.
"[We continue] to focus on operating efficiencies, cost management, innovation and cash-flow generation, while working alongside retail and food service partners to provide high quality baked goods at competitive prices," he said.
"Securing two complementary acquisitions in Fresh Start Bakeries and Great Kitchens substantially enhances Aryzta's market position by developing partnerships with leading operators in every consumer channel."
Mr Killian said the company was likely to remain focused on maintaining its businesses given the state of the world economy.
The company's results matched analysts' forecasts. John O'Reilly, of Davy Stockbrokers, pointed to the recent purchase of Tim Hortons coffee-shop chain in the US as a future driver of growth.
"We believe that the investments made by Aryzta in recent months, which increased exposure to the quick-service restaurant sector and to developing markets, are catalysts for maintainable growth," he said.