Aryzta shareholders frustrated by share price collapse

Aryzta shareholders are said by market sources to be extremely frustrated at the recent collapse in the company's share price. Shares in the Swiss-Irish food group fell just under 25 per cent this week after the company missed its own revenue targets and chief executive Owen Killian announced he had sold most of his own stake in the business.

Several institutional investors were described by senior market sources as unhappy with the company’s communication about key elements of its financial performance.

Aryzta’s credit arrangements appear to have been misinterpreted by analysts at a conference call on Monday, following its half-year results.

In addition, a key metric about the acquisition of new contracts does not seem to have stemmed unease about the underlying health of the company's US arm, which lists coffee-and-donut chain Tim Hortons among its clients.

Senior executives met shareholders in the US on Thursday as part of an ongoinginvestor roadshow, but the company failed to reply to requests for comment.

US financial groups Massachusetts Mutual and Oppenheimer Funds, two of Aryzta's largest institutional shareholders, said they did not comment on specific investments.

Aryzta’s shares traded down again on Thursday, falling 0.3 per cent to €33.14, another four-year low, having been up for most of the session.

Surprise disclosure

The company’s shares fell by 11 per cent on Wednesday after Mr Killian made a surprise disclosure that he had sold two-thirds of his stake in the company. He said the move did not reflect his confidence in the group but had been triggered by a decline in the “collateral value” of the shares.

Mr Killian, who has been chief executive since the group was formed in 2007 from the merger of the Irish Agricultural Wholesale Society (IAWS) and Swiss group Hiestand, is under pressure to halt a rapid slide in investor confidence linked to the performance of its US arm, which is reported to have lost some big baking contracts.

Apart from Tim Hortons, the company supplies McDonald's, Subway and Burger King with a range ofparbaked products.

Investors are also said to be unhappy with the group's recent acquisition of a 49 per cent stake in French frozen food group Picard for €446 million, which was funded through the disposal of its stake in agricultural services group Origin.

Prior to the Picard deal, Aryzta had signalled its intention to dispose of its frozen food assets to concentrate on its core bakery business, which includes La Brea Bakery and Otis Spunkmeyer among its stable of brands.

The company is in a "fragile recovery mode, still facing a bumpy road ahead", wrote Jean-Philippe Bertschy, an analyst at Bank Vontobel AG in Zurich, in a note.