The Cuisine de France owners issue a profit warning and prepare to enter recovery mode...
There's bad news for Aryzta shareholders this morning - the Irish/Swiss bakery and frozen foods group, best known here for its Cuisine de France product range, has informed the stockmakret that a review of its first five months of trading to December 2016, has shown earnings per share are 20% lower than the previous year.
The company says that the under performance is largely due to North American weakness compounding the already anticipated weakness in Europe due to the company’s ongoing commissioning of a key bakery in Germany and the impact of Brexit.
It adds that the group's poor performance in Norther America is partially due to, "higher than expected labour inflation costs."
Aryzta acquired Cloverhill in the US and Canada's Pineridge bakery for €730m in 2014.
Commenting on this announcement the CEO, Owen Killian, said: "The performance in the current period is both unexpected and extremely disappointing.
"Cloverhill was acquired with the objective of unlocking the Otis Spunkmeyer (confectionery) brand into retail. Aryzta’s brand investment strategy in Otis Spunkmeyer will in time replace the co-pack (contract packer) volumes and create a more predictable and higher margin business."
A statement from the group added, "We know that it will take a recovery followed by a period of sustainable growth to re-establish investor confidence. It will also require an alignment with our key shareholders in terms of our future strategy and capital allocation."