Aryzta stock rallies on evidence of stabilisation
Aryzta shares surged to close 10.7pc higher in Dublin yesterday, after results which were seen as evidence of stabilisation in the baked goods giant after a capital raise last year.
Earlier, the Cuisine de France owner reported organic revenue growth of 0.7pc in the six months to January 31 in results marking the first improvement in margins in North America since 2014.
CEO Kevin Toland, who took the helm at Aryzta in 2017, told the Irish Independent that a multi-strand stabilisation plan set out last year was beginning to bear fruit.
That has involved using elements of last October's €740m capital raising to cut debt to 2.5 times earnings, to fund a three-year working capital plan and to support 'Project Renew' which aims to generate annual savings of €90m by 2021.
'Renew' delivered savings of €7.6m last year, and will accelerate in 2019 including funding a shift to automation to deliver longer-term savings, Mr Toland said.
Further margin improvements will be seen in 2019, he said.
Davy Stockbrokers analysts said they believe "a pathway to stabilisation is now emerging" at the company.
Aryzta has been buffeted on the markets since 2016, when a huge acquisitions splurge under previous CEO Owen Killian came unstuck as the company struggled under the resulting debt burden.
Results yesterday showed net profit for the six-month period was €39.5m.
Net debt was €881m and revenues for the period were €859.7m.