Swiss-Irish baked goods company Aryzta said today that market conditions and prospects deteriorated sharply since the middle of March due to the Covid-19 pandemic, leading to a steep decline in April revenue.
The group, which is being targeted by activist investors Veraison and Cobas Asset Management, said it had taken action to maximise cash and reduce costs and had seen some early signs of recovery in May.
"It is now clear that Covid-19 will have a material impact on group performance in full year 2020," Aryzta said in a statement, adding it was not yet possible to fully gauge the consequences.
The company behind the Cuisine de France brand said that group revenue fell 24% to €644.2m in the quarter to April 30, Aryzta said.
But it said it has seen three consecutive weeks of revenue improvement in May.
The company also makes McDonald's hamburger buns and Otis Spunkmeyer cookies.
Aryzta said yesterday it would hold an extraordinary general meeting by mid-August following a request by Veraison and Cobas Asset Management, which earlier in May announced a tie-up encompassing 17.3% of shares.
In April, Aryzta appointed Rothschild & Co to review its strategic and financial options to maximise value for all stakeholders.
The review is expected to be concluded at the latest by end of July, Aryzta said.
Last week Cobas called for the EGM to remove a number of board members including chairman Gary McGann.
Cobas is proposing to replace the board members with its own candidates.
It has also called for chief executive Kevin Toland to step down from the board to enable him to focus on its CEO functions.
In today's results statement, Kevin Toland said that Covid-19 is unprecedented and has impacted the lives of people across the world.
Aryzta's chief executive said that it will have a material impact on its group performance in 2020.
"At Aryzta, while prioritising the health and safety of our colleagues, customers and suppliers, we have taken decisive action to protect the business and our cash resources," Kevin Toland said.
"Our Q3 revenue has been strongly impacted by the pandemic but our facilities and products are positioned to recover and compete as economies stabilise and return to growth. Our management focus is on serving customers through this difficult period while preserving the value of our assets," he added.
Shares in the company raced higher in Dublin trade today.
