Shares in Cuisine de France's parent company have plummeted...
Aryzta has announced that its three most senior executives have all tendered their resignations.
The action has been taken as the share price of the Irish-Swiss bakery group – best known here for its Cuisine de France range – plummets, following its latest shock profit warning to the markets.
Chief executive Owen Killian, chief financial officer Patrick McEniff and Americas division CEO John Yamin will step down at the end of the current financial year next July.
The board, under new chairman Gary McGann, is to engage a leading international recruitment firm to identify what it calls “the highest calibre candidates for these important roles”.
To support an orderly transition, the board has appointed three new members to the Aryzta executive management team with immediate effect. These are Dermot Murphy, Ronan Minihan, and Robert O’ Boyle; chief operations officers of Europe, the Americas and Asia Pacific respectively
Meanwhile, Aryzta has also commenced a process with Lion Capital that may lead to the sale of the group’s 49% stake in French frozen food specialist retailer Picard. Aryzta acquired that stake – somewhat controversially, as people questioned the reasons behind taking a minority share and entering a non-bakery sector – for €450m, just two years ago.
Lion Capital is the minority shareholder in Picard and the proceeds of any sale would be used to reduce debts and strengthen the group’s balance sheet. Aryzta has also increased its borrowing headroom with its bankers at no extra cost to the group.
A January review of Aryzta's first five months of trading to December 2016 showed that earnings per share were 20% lower than the previous year.
The group said that the under performance was largely due to North American weakness compounding the already-anticipated weakness in Europe due to Aryzta’s ongoing commissioning of a key bakery in Germany and the impact of Brexit.
Poor performance in North America was 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 at the time, 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."