Group sales at global bakery business Aryzta have remained flat despite growth in its European division.

The business – which this month announced the appointment of new CEO Kevin Toland – reported underlying revenue for the quarter to 30 April was flat year on year, but was up 2% on the previous quarter.

Revenue from Aryzta’s European division rose 3.9% year on year to €436.9m, which reflected the temporary benefit of delays in the scheduled transfer of volume in Switzerland, said the company.

Demand remains strong in the region, stated Aryzta, adding it had made progress in commissioning new capacity, but that it faced “considerable challenges in optimising this capacity, which will take significantly more time to address than expected”.

The business added that Brexit and some raw material inflation were continuing to affect prices.

In contrast to Europe, underlying revenue in Aryzta North America fell 4.3% due to a steep drop in sales volumes.

“North America continued to experience declining revenue from a small number of already disclosed customer contract volume losses,” stated the company. “However, the North American business faces headwinds from increasing labour supply issues and negative operating leverage from weaker revenue.”

When his appointment was announced two weeks ago, Toland said he was “looking forward to working with the Aryzta board, management and employees to deliver, in time, the objective of performance and growth”.

Toland, a former chief executive and president of Glanbia USA & Global Nutritionals, is to replace Owen Killian who, along with chief financial officer Patrick McEniff and Americas CEO John Yamin, resigned their roles earlier this year. Their departure followed a period of trading described as “unexpected and extremely disappointing” by Killian.