Aryzta profits up 2.2% to €146m

FOOD GROUP Aryzta reported half-year results in line with forecasts yesterday. The company announced a 0.9 per cent increase in revenues up to €1.9 billion, with Ebita (earnings before interest, tax and amortisation) up by 3.3 per cent to €178.8 million in the six months to January 31st.

Aryzta chief executive Owen Killian described the half-year performance as “robust”, despite challenging trading conditions.

Pretax profits were up by 2.2 per cent at €146.5 million, while earnings per share (EPS) advanced by 3.8 per cent to 145.6 cent, and its target of a full-year EPS of 338 cent for 2012, and 400+ cent for 2013, remains unchanged, the company said.

Revenues in its food group were up by 9.4 per cent to €1.4 billion, buoyed by strong sales in its North American division (+9.6 per cent), where its brands include Otis Spunkmeyer and Maidstone.

In Europe, where its brands include Delice de France and Hiestand, sales increased 7.5 per cent. In the rest of the world revenues advanced by 21 per cent, with its acquisitions in Singapore and Taiwan “performing satisfactorily”.

Aryzta’s food group reported net debt of €952.4 million, down by €100,000 from the same period in 2011, due in part to the firm’s successful €140 million share placing in January.

Mr Killian referred to 2012 as a “critical year of transformation” for the company, adding that its enhanced customer focus, combined with it strengthened balance sheet, “will enhance future shareholder value from growth with existing customers and sector consolidation opportunities”.

However, Aryzta referred to several challenges facing the company, including the widespread austerity measures in the European market, as well price inflation for raw materials, which remains “volatile”.

As previously reported, revenues at Origin – Aryzta’s Irish, British and Polish agri-services business – fell by 17 per cent to €507.4 million, which led to ebita declining by 66.8 per cent to €5.9 million, and a 42.6 per cent decrease in underlying profits.

However, it performed “to expectation”, given the impact of various acquisitions made during the second half of 2011.

In a note, NCB Stockbrokers said Aryzta’s results represented a “slight miss” at the operating profit level but that overall they were “in line” with expectations. But it questioned whether or not the group’s goal of hitting a 400 cent EPS target in 2013 could be a “little too ambitious”.