Aryzta hits a new low, again

Despite the flack that State airports company DAA has taken from some airlines lately, it's a fair bet that Kevin Toland probably wishes he was still chief executive there rather than at Aryzta, whose helm he took last year.

Aryzta, the company behind Cuisine de France bread and doughnut maker Otis Spunkmeyer, is enduring another terrible year. On Monday, Berenberg analyst Fintan Ryan suggested that the Irish-Swiss baker would have to seek more cash from shareholders to help it cope with its €1.6 billion net debt burden.

This knocked almost 9 per cent off the shares, which were down as much as 19 per cent at one point yesterday at a new low of 10 swiss francs.

The company’s problems keep mounting. In May, it issued a fresh profit warning, suggesting that full-year earnings would be 9 per cent to 12 per cent less than hoped. At the same time it announced a plan to save about €200 million.

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That may not be enough, as Ryan also pointed out that the sunshine in which most Europeans have been bathing recently could be bad news for Aryzta. The heatwave could mean a poor harvest, which will drive up raw material costs. Last week's suggestion by analysts at Credit Suisse that Aryzta may have to sell assets could yet become a reality.

Aryzta has mostly struggled since it was formed by the marriage of Heisland Holdings and IAWS 10 years ago this month. Poor acquisitions, some of which it sold earlier this year, did not help its case.

If, as Credit Suisse, indicated, further asset sales follow, observers may wonder if there was any point to that merger, and if now may not be a good time to consider a divorce of sorts.