Frozen baked goods supplier Aryzta has reported modest organic revenue growth in its first quarter – and said this reflects the ongoing stabilisation of the business.

Aryzta today (26 November) reported a 0.3% organic revenue increase to €862.3m (£763m) in the three months to 31 October 2018. The results follow the business raising around €740m (£656m) through a controversial share offer.

Group reported revenue was down 5.2% over the period, reflecting the impact of disposals (5.3%) and currency fluctuation (0.2%). The company said that, as previously announced, it expects mid to high single-digit organic EBITDA growth for its 2019 financial year.

Revenue from the European division, which includes the UK, rose 2% on an organic basis but was down 1.1% on a reported basis.

Aryzta has been through a turbulent 12 months, with a shake-up of its senior team and the sale of its Cloverhill, La Rousse and Signature Flatbreads businesses.

Following a wide-scale business review, the company developed a plan focused on the frozen bakery market. This includes a cost reduction programme designed to bring €200m (£177m) in savings over a three-year period.

Aryzta is to reduce its debt and boost its working capital following a share offer that generated estimated net proceeds of around €740m. The offer had been challenged by Aryzta’s largest shareholder, Cobas Asset Management, which claimed the €800m (£709m) target was too high.

Commenting on today’s results, Aryzta chief executive Kevin Toland said the business’s “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”.

He added that the business would be able to focus on strengthening customer relationships, enhancing operating efficiency, reduce debt and, in time, return to growth.

“We are 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,” said Toland.

Azryta has recently expanded its vegan-friendly range with four new savoury pastries.

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