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Pre-tax profits at Aryzta surge 13pc

Monday, September 24 10:28:50

Pre-tax profits at Irish-Swiss baked goods group, Aryzta, rose by 12.9pc in its full year to the end of July last to E444.1m despite a challenging trading environment particularly across Europe, it said today.

The food company, formed from the merger of IAWS and Swiss bakery group Hiestand, reported a 8.5pc increase in group revenue to E4.2 billion.

Looking ahead, chief executive officer Owen Killian said, "We have no great expectation of any recovery in consumer behaviour during FY 2013 to support revenue growth and therefore expect underlying fully diluted EPS growth to broadly mirror FY 2012 with an increase of 5 percent -10 percent."

Aryzta added that the economic outlook for developed markets remains extremely challenging, particularly in Europe where financial market difficulties and government austerity measures continue to subdue consumer sentiment.

The Aryzta chief executive said the company has no great expectation of any recovery in consumer behaviour in its new fiscal year.

He said the company expects underlying fully diluted EPS growth to broadly mirror this year's results with an increase of 5-10pc.

Aryzta owns almost 69pc of Origin Enterprises, which reported a 3.1pc increase in revenue to E1.34 billion.

Looking at the figures in more detail shows that its Food Europe division saw an underlying revenue decline of 1pc, masked by an acquisition contribution of 7pc, the latter reflecting the Honeytop deal in August 2011. Overall, revenues grew by 7.5pc to E1.27bn. EBITA margins expanded by 70bps. EBITA rose by 13.7pc to E169.5m.

Its Food North America: division saw strong revenue growth was maintained through the year and on an underlying basis rose by 7pc. Overall revenue advanced by 13.2pc to E1.37bn, supported also by currency changes and some modest mergers and acquisitions.

"Davy analyst, John O'Reilly said the results were "robust".

"good performance, apart from in Europe, characterised Aryzta's 2012 result - underlying growth was very good in the US and in the rest of the world while Food Group operating margin overall gained 60bps. Via its ATI programme, the group is working to achieve a 15pc return on investment target by FY2015. This implies good continuing growth potential, although this year growth will again be checked by a difficult European trading environment. Our forecast growth of 12.4pc is too high given the guided EPS range of 5-10pc."