FOOD GROUP Aryzta, which was formed from the merger of Ireland's IAWS and Switzerland's Hiestand last month, has posted a profit before tax of €218 million and said it was well-placed to deliver further earnings growth.

Aryzta reported pro forma revenues of €3.13 billion for the year ending July 31st, up 33.5 per cent on the previous year. Pro forma operating profit for the company was €262 million, with earnings per share of 202 cent.

The result reflects a strong performance from both IAWS and Hiestand, the company said. Group revenue at IAWS was 39.5 per cent higher at €2.661 billion.

Underlying revenue growth in food operations in North America and Europe was 14.1 per cent and 9.4 per cent respectively.

Food grew revenues to €1.162 billion, an increase of 14.1 per cent with an underlying growth of 11.1 per cent. Revenues at Origin Enterprise, in which Aryzta has a 71.4 per cent stake, were €1.499 billion, an increase of 68.5 per cent with an underlying growth of 29.9 per cent. Group operating profit, including associates, rose by 29.6 per cent to €224.4 million. The operating profit from the food business including associates and joint ventures was €151.2 million compared to €131.3 million in the previous year - an increase of 15.1 per cent.

Hiestand reported a 14.5 per cent rise in group revenues to €243.7 million for the six months ended on June 30th, while operating profit was up 20.2 per cent to €24.7 million.

NCB analyst Paul Meade said the new Aryzta group was capable of delivering earnings per share growth of 10 per cent, with top line growth depending on product churn rates and new product innovation.

"Declining commodity costs and efficiencies should ensure margins are maintained," said Mr Meade in a note. "Growth opportunities will stem from expansion into adjacent markets in Europe, the commissioning of its new Dublin plant and further growth in the US."

The better than expected performance by Origin Enterprises underpinned the results and the continuing dynamism within that business will benefit Aryzta's future performance, he said.

Davy analyst John O'Reilly said the results demonstrated good underlying growth in food in North America and Europe. "While superseded by the formation of Aryzta, the results of IAWS for the year ended July were impressive in the context of the cost and currency change headwinds faced in the period."