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Aryzta chairman puts prospect of a sale back on the table

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kevin toland

kevin toland

kevin toland

URS Jordi, Aryzta's newly appointed chairman, has said the company will explore "all strategic options available".

Mr Jordi, who last month said now was "the worst time" to sell the business, added that the firm's management will do its utmost to put the company back on the road to success.

Aryzta will continue to look at "all unsolicited expressions of interest received," he added.

On a call with analysts, Mr Jordi said that since Aryzta's extraordinary general meeting last month the company had established a special sub-committee to deal with the unsolicited offers it is receiving.

Among the options being explored is the potential sale of parts of the business.

Aryzta confirmed at the beginning of September that it was in advanced talks with US hedge fund Elliott about a potential public tender offer for the entire company.

Yesterday, the company said it could not discuss the current status of these talks.

Davy analyst Roland French said that in the absence of a deal that would take the company private, "the magnitude of Aryzta's look-through leverage will require a more radical restructuring of its operating footprint".

In the 12 months to August 1 the troubled Swiss-Irish food group reported a 13pc fall in total revenue to €2.9bn. The company is best known in Ireland for its Cuisine de France brand, and supplies burger buns to McDonald's.

It has been badly hit by the temporary closures of restaurants and cafes as governments shut down sections of the economy to limit the spread of Covid-19.

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All of the regions Aryzta operates in experienced a fall in revenue over the 12 month period, with Europe - Aryzta's biggest market - experiencing the largest decline.

Earnings before interest, taxation, depreciation, and amortisation (Ebitda) of €260m decreased by 33pc year-on-year on a like-for-like basis.

The effect of the Covid-19 had a material impact on underlying Ebitda generation, as people's eating habits changed due to the pandemic.

Aryzta reported a net loss of €1bn for the year, largely due to impairment charges and losses on a disposal, mostly coming from the North American region.

Project Renew has delivered cumulative savings of €92m since launch and run-rate savings at the period end were circa €65m.

At the financial year-end the group, which currently has about 2,000 employees on furlough, had liquidity of €424m.

The company said it cannot give an earnings guidance and it warned that the pandemic will have a "material effect" on financial year 2021 earnings.

CEO Kevin Toland said the company was "well positioned" to recover.


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