ZURICH (Reuters) - Bakery company Aryzta’s (ARYN.S) management shuffle continued on Monday, with its top lawyer announcing he is stepping down after the Swiss-Irish firm’s first-half net loss widened amid a “multi-year turnaround programme”.
Pat Morrissey told the board he intends to quit, prompting a search for his replacement, the company said in a statement.
In less than a year, Aryzta has swapped out several executives including its chief executive and chief financial officer. It had a $1 billion loss in its last fiscal year.
For the six months ended on Jan. 31, Aryzta reported a net loss of nearly 197 million euros, widening from 141 million euros in the year-earlier period, as it took a hit on assets that it has been disposing and from restructuring costs.
Still, the company said it had completed its refinancing and would not call a 400 million euro ($493 million) hybrid bond in April.
The company said it was on track to dispose of assets worth more than 450 million euros as it seeks to cut debt and improve earnings before interest, taxes, depreciation and amortisation (EBITDA) that in the first six months fell nearly 30 percent to 161 million euros.
“We are in a multi-year turnaround programme,” Chief Executive Kevin Toland, who was named last year, said. “Under our new leadership team, we are reshaping the group’s focus on our core business-to-business frozen bakery customers, improving operational efficiencies and de-leveraging the balance sheet.”
It had 1.6 billion euros in net debt as of Jan. 1, with net debt at 4.2 times EBITDA. Without a one-time impact from tax changes in the United States, the company would have been even closer to its debt covenant limit of 4.75 times EBITDA.
“The cash costs related to restructuring were significant, and are likely to continue,” said Jean-Philippe Bertschy, an analyst at Bank Vontobel.
“Underlying sales growth seems to have stabilised at around 1 percent, however, with an ongoing weak volume development. However, the profitability remains weak.”
Aryzta’s shares fell 1.8 percent in early trading, extending a drop of more than a third so far this year.
($1 = 0.8108 euros)
Reporting by John Miller; Editing by Michael Shields