SHARES in Aryzta fell in Zurich yesterday, after the speciality baker's half-year results barely met market expectations.
The Irish-led firm said group revenue rose less than 1pc to €1.91bn during the six months to the end of January, resulting in a 3.3pc increase in earning before interest, tax and amortisation, to €178.8m.
Net profit fell more than 56pc to €71.8m, though that was largely because of a one-off €121m gain in 2010 on the back of the acquisition of Maidstone Bakeries in Canada and changes to its agri-services subsidiary Origin Enterprises.
Diluted earnings per share of 145.6c were up 3.8pc while the firm left its full year EPS forecast of 338c unchanged.
Despite the flat performance overall, analysts broadly welcomed the results, and pointed to strong growth in the Food Group side of the business, which offset a drop in profit at Origin.
Net profit from Origin fell 66.8pc after changes in that business pushed most of its activity into the second half of the year.
In contrast, the food division boosted profits by 11.3pc, with strong growth in North America offsetting difficult trading in Europe.
Davy Stockbrokers' John O'Reilly pointed to weaker turnover in the region.
"Food Europe revenues grew by 7.5pc but this includes a 0.3pc decline at an underlying level. For second quarter, the underlying revenue decline was -1.8pc. EBITA margins advanced by 50bps to 11.8pc [but] trading is expected to remain challenging through the rest of the year," he said.
Company chief executive Owen Killian described the overall results as "robust despite challenging trading conditions".
"This year remains critical for the transformation for Aryzta with significant change under way across the group to enhance our customer centric focus.
"This, combined with our strengthened balance sheet, will enhance future shareholder value from growth with existing customers and sector consolidation opportunities," he said.
Mr Killian also highlighted "continuing raw material price volatility" but added there had been "some moderation" in prices.
Mr O'Reilly was broadly positive on the results.
He maintained his "outperform" rating on the company.
"Aryzta has delivered an impressive result in the context of what looks to have been a very tough trading environment in Europe.
"A 20bps rise in operating margin in food group must be regarded as an excellent achievement given the margin attrition recorded by the sector and many of its leading operators," he said.
NCB's Darren Greenfield described the results as a "slight miss at an operating level" but in line with forecasts overall.
Aryzta closed in Zurich down 0.88pc at 45.25 Swiss Francs, while in Dublin the stock climbed 2.63pc to €37.10.