Revenues increase by 36% at food group Aryzta

REVENUES AT food group Aryzta jumped by more than a third in the six months to the end of January, due primarily to the impact of two major acquisitions last year.

Revenues for the first half of 2011 stood at €1.9 billion, up 36 per cent from €1.4 billion the previous year.

Earnings before interest, tax and amortisation (Ebita) increased by 51.8 per cent to €173 million from €114 million, while earnings per share were up 34 per cent to 140.3 cent, ahead of most market expectations.

The Zurich-based company, which was formed following the merger of Iaws and Swiss bakery firm Heistand in 2008, acquired two US businesses last year, significantly increasing its presence in the North American bakery sector.

However, chief executive Owen Killian stressed that the increase in revenue in the first half also reflected underlying growth due to consumer recovery across most markets.

Underlying growth in Aryzta’s North American food division – which now represents approximately 50 per cent of revenues – was up 2.1 per cent.

Revenue at its Food Europe division continued to decline, down 0.9 per cent year-on-year, although this was due mainly to continuing challenges in the UK and Ireland.

Underlying revenue from the company’s smaller Latin American and Asian divisions grew strongly, up more than 18 per cent on the year.

Net debt stood at €1.06 billion.

The company reiterated its guidance of earnings per share of 300 cent for the full year, although it warned that food inflation could lead to double-digit price inflation for customers.

Pointing out that price volatility was likely to become a feature of the industry, Mr Killian said sourcing product from secure sources would be crucial for the company.

He added that the unexpected speed and severity of cost increases would lead to a return to dynamic pricing but that the impact would not be evident until next year’s results.

Aryzta, which is a 71 per cent shareholder in agri-business company Origin Enterprises, reiterated its commitment to that company, which last week posted strong first-half results.

Origin announced a 3 per cent rise in revenues to €613.3 million in the six months to the end of January.

While operating profit rose 14 per cent from €21 million to €24 million, as the company benefited from rising food prices.

Aryzta’s share price closed down by just under 1 per cent in Dublin yesterday at €33.60.