Aryzta shares surge on upbeat earnings outlook
Shares in Cuisine de France owner Aryzta surged by nearly 11% on the company saying it is stabilising its business and remains on course to meet earnings targets.
Aryzta posted a 4.2% year-on-year drop in first-half revenues to €1.71bn, with underlying net profit plummeting by more than 22% to €39.5m.
However, the Swiss-Irish company pointed to organic revenue growth of 0.7%, over the six months to the end of January, as indication of progress.
It still expects to post mid-to-high single digit percentage growth in organic earnings for the full year.
"The [first-half] result is consistent with our focus on stability. This performance represents a first step towards the delivery of our multi-year turnaround commitment," said chief executive Kevin Toland.
Aryzta's shares have plummeted by around 74% over the past 12 months; the group hampered by underperformance in the US and investor unease at a lack of certain asset disposals.
The half-year figures showed a 1.9% rise in organic revenue in Aryzta's European business, a 6.7% rise in its 'rest of world' operations, but a 1.8% drop in North American organic revenues.
However, Davy analysts said: "With first half margin in North America expanding year-on-year for the first time since 2014 we believe a pathway to stabilisation is now emerging at Aryzta."
Late last year Aryzta passed a contentious rights issue which raised around €740m in funds to pay down debt and fund its Project Renew turnaround programme.
"Project Renew will enhance both our operating efficiency and our competitive position and in the first half already delivered the expected level of savings," Mr Toland said.
