‘Disappointing’ result for Aryzta

Swiss based food group Aryzta reported a 13.6 per cent jump in revenues for the first half of its financial year on Monday, but it still missed analysts forecasts.

In the six months to January 31st 2015, group revenues rose by 13.6 per cent to € 2.39bn, as group earnings increased by 15.5 per cent to €229 million.

Aryzta’s food group grew its revenues by 17.2 per cent to €1.86bn, with sales in its European arm up by 5.4 per cent to €805.1 million, and its north american division up by 31.1 per cent to €937.2m. In the rest of the world, Aryzta grew its sales by 8.5 per cent to €115.6m. Earnings (EBITA) increased by 15.8 per cent to € 224.8m.

Aryzta chief executive officer Owen Killian said that the results underscores the "substantial expansion" of its food group business over the last six months.

“Our European performance remains resilient, being well positioned and well invested to benefit from continued strong growth in the in-store bakery channel. The restructuring ofour flatbread business into a 50/50 JV will reduce European revenues by 6 per cent over the next 12 months. Our immediate focus is to generate sustainable underlying revenue growth, while optimising our production for higher returns and increased free cash flow,” he said.

Aryzta said given weak underlying revenue growth, combined with favourable currency translation, it is forecasting underlying fully diluted EPS at the lower end of its 7 per cent-12 per cent guidance.

In a note, Davy Stockbrokers said it was a “disappointing result”, with a weak second quarter performance in its North American food division.