Shares in Aryzta take fresh 8pc knock
Shares in food group Aryzta, headed by former DAA chief Kevin Toland, fell by as much as 8pc yesterday, after Joern Iffert, a company analyst at UBS, cut the troubled firm's price target by 41pc.
The company is currently in the middle of 'Project Renew', a multi-year turnaround commitment, which the group aims to deliver €40m in run-rate savings in the 2019 financial year. In his report, Mr Iffert cited delays in cost cuts and deteriorating consumer confidence, that could impact top-line profit growth.
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The analyst wrote that "Aryzta will not be immune" to any coming economic slowdown and the investment bank cut its price target to just 0.70 Swiss francs. The stock moves yesterday put the company on track for a 12pc drop this week and 36pc in the year to date, after it recorded an 870pc decline last year.
The analyst also said that high debt levels and limited cash generation capped the stock's attractiveness, and that its cost-saving plans appeared "complex". In a trading update for the three months to April 30 that was issued in June, Aryzta said it expected low-single-digit underlying earnings growth for the current financial year, after it had previously predicted mid-to-high single-digit earnings growth.
Last year, the group raised €800m from shareholders in a controversial move that was narrowly approved.