Aryzta expects to raise more than €450 million from full-year asset sales

Beleaguered Swiss-Irish food group Aryzta said on Monday it expects to raise more than €450 million selling in the year to July, as it revealed it had agreed to offload its stake in a flatbreads business and committed to disposing its interest in French frozen foods company Picard.

Revenues at Aryzta fell by 6.3 per cent in the first half of its financial year to €1.79 billion, as the maker of frozen baked goods reported a pre-tax loss of €231 million for the period.

Revenues in the group’s North America division fell by 14.1 per cent to €786.4 million, driven by volume declines at the Cloverhill Chicago and Cicero bakeries, which were disposed of subsequent to the end of the period. Excluding Cloverhill, group revenues would have achieved organic growth of 1.3 per cent.

In Europe, revenues rose by 0.7 per cent, driven primarily by increases in price/mix, while in the rest of the world, revenues were also up, by 2.2 per cent.

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Aryzta lost its long-standing chief executive Owen Killian and two other senior executives 12 months ago following a series of profit warnings and disappointing financial results. Under chairman Gary McGann and its new chief executive Kevin Toland, who joined the company in September from airport operator DAA, the group has focused on paying down debt, which had doubled to €1.7 billion in the space of four years.

The company sold its La Rousse Foods unit in January, two Cloverhill facilities in February and agreed this month to sell its 50 per cent stake in a flatbreads business, which makes tortilla wraps, pitta and naan bread to its joint venture partner for €34 million.

Aryzta said on Monday that the long-awaited sales process for its 49 per cent stake in Picard is underway. The group paid €447 million in 2015 for the investment, which was badly received by investors at the time.

London-based private equity firm Lion Capital owns 51 percent of Picard, and Aryzta needs its approval for a sale.

Shares in the company fell by as much as 7.7 per cent on Monday before closing 2.3 per cent lower in Zurich to 23.35 Swiss francs (€19.98).

Group earnings before interest, tax, deprecation and amortisation (ebitda) fell by 30 per cent to €161.3 million in the first half, while ebitda margins fell by 3 percentage points to 9 per cent.

In other news, Aryzta said that Pat Morrissey, its general counsel and company secretary, is to step down from the board. The company said it would commence a process to look for his successor, with an appointment to be announced "in due course".