Aryzta shares slide on earnings outlook cut
Shares in troubled food group Aryzta fell more than 15pc in afternoon trading yesterday after the group revised its earnings outlook.
In a trading update for the three months to 30 April, Aryzta said it expects low-single-digit underlying earnings growth for financial year 2019.
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It had previously predicted mid-to-high single digit earnings growth.
The group, headed by former DAA chief Kevin Toland, reported a 3.8pc decline in organic revenue in the North American market, while business in Ireland and the UK "remains challenging".
Overall, Aryzta reported a 1.3pc increase in organic revenue in the three months to 30 April.
Reported revenue during the period was €847.9m, an increase of 4.5pc year-on-year. This was helped by a positive currency movement.
The company said the performance reflected "ongoing stabilisation" at group level.
In Europe, Aryzta reported "strong" organic growth of 4.4pc.
Meanwhile, growth of 8.9pc in the rest of the world was partially offset by a weaker organic performance in North America.
The company is currently in the middle of 'Project Renew', a multi-year turnaround commitment, which the group said is "on track" to deliver the targeted €40m run-rate savings in financial year 2019.
"Our quarter three performance, which follows a consistent period of improving revenue performance, shows sequential improvement in terms of group organic revenue," Mr Toland said.
"Continued stabilisation of the business, delivering for our customer base and realising the expected benefits from Project Renew remains our absolute focus within the current financial year," he added.
Last year the group tapped its shareholders for €800m in a controversial move that was narrowly approved.
The company plans to use the money to pay down debt, fund its transformation programme, and for general corporate purposes.