Aryzta pretax profit up 16.6% to €110m

BAKERY GROUP Aryzta has defied the recession by announcing a 16.6 per cent increase in pretax profits to almost €110 million for the six months to the end of January.

The owners of 23 bakeries worldwide and brands such as Cuisine de France and La Brea saw its revenue grow by 15.8 per cent to €1.57 billion over the period, despite shifting consumer trends in North America and lower volumes in the Irish and British business.

Aryzta, which commenced trading in August 2008 following the merger of Irish baker IAWS and the Swiss company Hiestand, enjoyed higher margins across the group, with operating profits at its European business rising 11 per cent to €64 million and operating profits at its North American division increasing 26 per cent to €34.3 million.

Meanwhile, operating profits at Origin Enterprises, of which Aryzta owns 71.4 per cent, increased 35 per cent to €27.2 million.

The company’s new production facility at Grangecastle in Dublin is now up and running following a €200 million investment by the group and Aryzta said this would contribute to its operational efficiency from 2009 onwards.

Aryzta chief executive Owen Killian said the company had achieved what he believed to be “excellent” results despite the subdued global environment for consumer spending.

“Consumers are gripped by fear and that is becoming evident across all of our channels,” he said. “There is lower consumer footfall in convenience stores and people are spending less when they come in.”

Volumes of its par-baked goods sold in Ireland and the UK declined, but now appear to have stabilised, he added. A shift in consumption of baked goods in the US from the food service to retail channels was offset by the expansion of La Brea Bakery into the retail sector, while there were also new customer wins for its other major North American brand, Otis Spunkmeyer.

Mr Killian said that 2009 revenues would be “difficult to predict” across all of its earnings channels because the credit environment was affecting its suppliers and customers.

Aryzta’s share price climbed 70 cent to €16.95 on the Iseq index yesterday, a gain of 4.3 per cent.

Analysts described its first-half performance as strong, with Davy Research food sector analyst John O’Reilly concluding that it would “continue to bet on Aryzta for superior performance in a sector and food industry context”.