Thursday 21 November 2019

Aryzta chiefs won't be rushed into Picard sale

Aryzta ceo Kevin Toland
Aryzta ceo Kevin Toland
John Mulligan

John Mulligan

Aryzta is under no pressure to offload its 49pc stake in French frozen food firm Picard, even as it eyes at least €450m in disposal proceeds by the end of the year, according to chief financial officer Frederic Pflanz.

And CEO Kevin Toland has ruled out a sale of the troubled group's flagship La Brea artisan bread brand.

It bought California-based La Brea in 2001.

The embattled Swiss-Irish baked goods firm, whose brands also include Cuisine de France, has been selling non-core assets as it tries to shore up its business.

The group generated net proceeds of about €30m from the sale of its La Rousse foods business, and €57m from the recent disposal of its troubled Cloverhill and Cicero facilities in the United States.

That's left some analysts predicting that Aryzta will have to complete the sale of its Picard stake before the end of its July year-end in order to meet its own cumulative asset sale target.

But Mr Pflanz, who joined the group in January, insisted that's not the case.

Picard is owned jointly with private equity group Lion Capital. "We're not only looking to sell our joint venture, but we're looking at other disposal processes," he said.

"We're happy that the processes are already under way, which is a good thing.

"I definitely do think that anybody who is buying or selling a business will drive a hard bargain."

He added that even if Aryzta didn't reach its €450m disposal target by the financial year end, the group will remain safely within its debt covenants.

"We have no pressure whatsoever today on hard bargains, or low bargains, or mid bargains."

The executives were speaking as Aryzta said its earnings before interest, tax, depreciation and amortisation (ebitda), slumped almost 30pc to €161.3m in the first half of its financial year. Its revenue fell 6.3pc to €1.79bn.

Mr Toland, who started as CEO last September, and the group's board, have been trying to hammer Aryzta back into shape after an especially tortuous time in the US.

Mr Toland insisted yesterday that his actions at Aryzta are not linked to achieving any metrics with a view to his long-term incentive plan.

"In terms of our own incentives, and particularly my own, it's absolutely secondary… it's [about] doing the right thing for the business and putting the business in the right place," he said.

Irish Independent

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