Fyffes given NCB upgrade

FYFFES has been given a boost ahead of today’s annual general meeting, with NCB Stockbrokers upgrading the company’s earnings outlook.

In a research note, NCB upgraded its earnings per share forecast for the fruit imports by almost 8% to 21.9 cent for 2005.

Fyffes has benefited from higher banana prices because of a decline in production in some EU markets and favourable foreign exchange rates.

“Management’s strategy to reduce its business in the UK and expand into continental markets has enhanced current trading performance and reduced the group’s exposure to the retail price wars in the UK. In addition, contributions from its Everfresh acquisition in Sweden are ahead of expectations,” NCB said in a research note.

“This positive trading update should support the stock during the summer months ahead of intensive autumn discussions by the EU on regime changes. While clarity on exactly what regime changes will be agreed in Brussels, it seems that those countries seeking to maintain the status quo are gaining in numbers,” the broker added. The company earlier this month released an update on first-half trading, saying it expects a double-digit rise in interim profits.

Fyffes management is expected to maintain this outlook when the company’s shareholders meet in Dublin this morning.

One of the issues expected to be raised is the ongoing insider dealing action being taken by Fyffes against former shareholders DCC.

Though it cannot comment on the outcome, shareholders are interested in how much it could cost them. Last year the hearing cost Fyffes 4 million and shareholders may press the company on how much they will eventually have to pay in costs.

The case resumes today before Ms Justice Mary Laffoy.