Cuisine de France maker Aryzta, which trades on both Irish and Swiss markets, posted revenues of €862.3 million for its latest trading quarter, up marginally by 0.3%.
It reported revenue declined by 5.2% in the first quarter of its 2019 fiscal year, ending 31 October 2018, however, reflecting the impact of disposals (5.3%) and currency (0.2%).
“During the first quarter, we continued to work to address the challenges facing the business. We remain resolutely focused on our core, the frozen B2B bakery market and have the management team and resolve to implement what is a multi-year turnaround strategy,” Kevin Toland, CEO of Ayrzta said.
The group also achieved a successful capital raise of over €740 million, which it said will strengthen its balance sheet and provide the necessary liquidity and working capital funding to provide it with the time and financial flexibility to deliver on its multi-year turnaround plan.
“We recently completed a successful capital raise that generated estimated net proceeds of around €740m, which will reduce debt and provide the necessary capital to implement Project Renew, our competitive re-positioning programme targeted to achieve €90 million of annual run-rate savings by FY2021,” Toland added.
“This stronger capital structure and improved liquidity will allow the management team to transition from a position of perceived commercial stress to a position of stability and instead to focus on strengthening our customer relationships, enhancing our operating efficiency, ongoing deleveraging of our balance sheet and, in time, returning the business to performance and growth.”
As part of implementing Project Renew, Aryzta said that it expects to commit a total of €150 million over the next three years to deliver €200 million worth of savings. Approximately two-thirds of the €150 million investment will be in automation capex, Aryzta said, with the remainder invested in non-recurring restructuring costs.
The Swiss-Irish group’s organic revenue increased by 2% across its European businesses, despite negative impacts from currency (0.3%) and the disposal of La Rousse (2.8%).
Revenue in the region decreased by 1.1% in the quarter as volumes remained flat (0.1%) as the group continues to recover from cost increases in Europe as a result of sustained high butter prices and a recent increase in flour price.
The bread maker said that its first-quarter revenue was in-line with expectations, and expects its underlying performance for the 2019 fiscal year to be stable, with the early benefits of its Project Renew plan starting to flow through.
It expects mid to high single-digit organic EBITDA growth for the fiscal year.
Update; Aryzta's shares jumped by 7% in Dublin on Tuesday (27 November) after posting its first positive trading update in a number of years.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.