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“The road will likely not be without some temporary hazards,” Aelst stated in a note to clients in early May. “We see very good value in a company that, in our view, has significant upside over the next three years.”
Chief Executive Officer Michael McCain, who owns 33 percent of Maple Leaf, worked to revise a company restructuring project last year. Cutting duplicate overhead costs in its bakery division after closing two plants earlier this year and other efficiency gains should save C$25 million ($25 million) in 2012, says Kenneth Zaslow, an analyst at BMO Capital Markets in New York. An advertising campaign will promote bread as a healthy food choice and the company’s bakery margins will improve in the second half from lower wheat costs to help maintain annual double-digit earnings per share growth, stated McCain.
“We’re committed to double-digit earnings per share growth every year, and believe that we’ll deliver that this year as well,” he says.
The fresh bakery market has slowed 3% in Canada over the past 12 weeks, according to Nielsen Co., with Maple Leaf “down a little bit more than that,” McCain says.